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PIMI AGRO CLEANTECH, S-1/A Filing

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PIMI AGRO CLEANTECH,  S-1/A Filing Powered By Docstoc
					                                   As filed with the Securities and Exchange Commission on August 3, 2009

                                                                Registration No. 333-158986

                                    UNITED S TATES S ECURITIES AND EXCHANGE COMMISS ION

                                                            WAS HINGTON D.C. 20549

                                                               AMENDMENT NO. 2
                                                                    TO
                                                                  FORM S-1

                                                        REGISTRATION STATEMENT
                                                                  UNDER
                                                        THE S ECURITIES ACT OF 1933


                                         PIMI AGRO CLEANTECH, INC.
                                                    (Name of s mall business issuer in its charter)

                    Del aware                                                  700                                            26-4684680
         (State or other Jurisdiction of                          (Primary Standard Industrial                             (I.R.S. Employer
        Incorporation or Organizat ion)                           Classification Code Nu mber)                            Identificat ion No.)

                                                                 Mr. Youval Saly
                                                            Pimi Agro Cleantech, Inc.
                                                        269 South Beverly Drive suite 1091
                                                        Beverly Hills California 90212 USA
                                                           Telephone : (310) 203-8278


                          (Address and telephone number of principal executive offices and principal place o f business)

                                                           Pimi Agro CleanTech, Inc.
                                                        269 South Beverly Drive suite 1091
                                                        Beverly Hills California 90212 USA
                                                           Telephone : (310) 203-8278

                                            (Name, address and telephone number of agent for service)

                                                                      Copies to:

                         Marc J. Ross, Es q.                                                     Jonathan R. Shechter, Es q.
              Sichenzia Ross Friedman Ference LLP                                           Sichenzia Ross Friedman Ference LLP
                      61 Broadway, 32nd Fl .                                                        61 Broadway, 32nd Fl .
                   New York, New York 10006                                                      New York, New York 10006
                           (212) 930-9700                                                               (212) 981-6774
                        (212) 930-9725 (fax)                                                         (212) 930-9725 (fax)



                                     APPROXIMATE DATE OF PROPOS ED SALE TO THE PUB LIC:
                                      Fro m t ime to time after this Reg istration Statement becomes effect ive.

If any securities being registered on this Form are to be offered on a delay ed or continuous basis pursuant to Rule 415 under the Securit ies Act
of 1933, other than securities offered only in connection with div idend or interest reinvestment plans, check the following b ox: 

If this Form is filed to reg ister additional securities for an offering pursuant to Rule 462(b) under the Securit ies Act, che ck the following bo x
and list the Securities Act registration statement number of the earlier effect ive registration statement for the same offering. 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following bo x and list the
Securities Act registration statement number of the earlier effect ive registration statement for the same o ffering. 
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securit ies Act, check the following box and list the
Securities Act registration statement number of the earlier effect ive registration statement for the same o ffering. 

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following bo x.     

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See t he definitions of
“large accelerated filer,” “accelerated filer” and “smaller reporting co mpany” in Rule 12b-2 of the Exchange Act.. (Check one):

 Large accelerated filer              Accelerated filer             Non-accelerated filer               Smaller Reporting Co mpany 


The registrant hereby amends this registration statement on such date or dates as may be necessary to del ay its effecti ve date until the
registrant shall file a further amendment which s pecifically states that this registration statement shall thereafter become effecti ve in
accordance with Section 8(a) of the Securities Act of 1933 or until the registrati on statement shall become effecti ve on such date as the
Securities and Exchange Commission, acting pursuant to sai d Section 8(a), may determine.



                                                                         1
                                                 CALCULATION OF REGIS TRATION FEE

                                                                                                                                Amount of
                                                                                                                            registration fee
                                                                                                                            3) The registrant
                                                                                                           Proposed         previously paid a
                                                                                       Proposed            maxi mum          filing fee in the
                                                                                       maxi mum            aggregate              amount
                                                                Amount to be         offering price         offering             of $30.60.
Title of each class of securities to be registered               registered        per share(1)(2)           price                   (3)
Co mmon Stock, $0.01 par value per share                               405,703     $              1.35   $       547,700    $               30.60


(1) Estimated solely for the purpose of calculat ing the registration fee pursuant to Rule 457. The p roposed maximu m offering price is based on
the estimated high end of the range at which the common stock will initially be sold.

(2) The selling shareholders will offer their shares at $1.35 per share until the Co mpany ’s shares are quoted on the OTC Bulletin Board and,
assuming we secure this qualificat ion, thereafter at prevailin g market prices or privately negotiated prices. We will not receiv e proceeds from
the sale of shares fro m the selling shareholders.

3) The registrant previously paid a filing fee in the amount of $30.60.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registratio n
statement filed with the Securities and Exchange Commission is effecti ve. This pros pectus is not an offer to sell these secur ities and is
not soliciting an offer to buy these securities in any state where the offer or sale is not permi tted.

                                 PROSPECTUS S UBJ ECT TO COMPLETION, DATED                       August 3, 2009
                                               PIMI AGRO CLEANTECH, INC.

                                                              405,703 SHARES OF

                                                              COMMON STOCK

The Selling shareholders are offering up to 405,703 shares of co mmon stock. The selling shareholders will offer their shares at $1.35 per
share until our shares are quoted on the OTC Bu lletin Board and, assuming we secure this qualification, thereafter at prevail ing market prices
or privately negotiated prices. We will not receive proceeds from the sale of shares fro m the selling shareholders.

There are no underwrit ing co mmissions involved in this offering. We have agreed to pay all the costs and expenses of this off ering. Selling
shareholders will pay no offering expenses. As of the date of this prospectus, there is no trading market in our co mmon stock, and we cannot
assure you that a trading market will develop Our co mmon stock is not currently listed on any national securities exchange, t he FINRAAQ
stock market, or the OTC Bu llet in Board. There is no gu arantee that our securities will ever trade on the OTC Bulletin Board or other
exchange.

This offering is highly s peculati ve and these securities invol ve a high degree of risk and shoul d be considered onl y by persons who can
afford the loss of their entire investment. See "Risk Factors" beginni ng on page 6.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these secur ities
or passed upon the accuracy or adequacy of this prospectus. Any repres entati on to the contrary is a cri minal offense.

The date of this prospectus is August , 2009 .




                                                                          2
                                                            TABLE OF CONTENTS

                                                                                                                                   Page

Prospectus Summary                                                                                                                 4
Risk Factors                                                                                                                       6
Forward Looking Statements                                                                                                         10
Use of Proceeds                                                                                                                    10
Management’s Discussion and Analysis of Financial Condit ion and Results of Operations                                             11
Business                                                                                                                           14
Selected Financial Data                                                                                                            16
Description of Property                                                                                                            35
Legal Proceedings                                                                                                                  35
Management                                                                                                                         35
Executive Co mpensation                                                                                                            37
Certain Relationships and Related Transactions                                                                                     40
Description of Securit ies                                                                                                         43
Selling Stockholders                                                                                                               44
Plan of Distribution                                                                                                               45
Market For Equity and Related Stockholder Matters                                                                                  46
Indemnification for Securities Act Liabilities                                                                                     46
Legal Matters                                                                                                                      47
Experts                                                                                                                            47
Available Informat ion                                                                                                             47
Index to Financial Statements                                                                                                      F-1


You may only rely on the informat ion contained in this prospectus or that we have referred you to. We have not authorized any one to provide
you with different information. This prospectus does not constitute an offer to sell or a solicitation of an offer t o buy any securities other than
the common stock offered by this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an off er to buy any
common stock in any circu mstances in which such offer or solicitation is unlawful. Ne ither the delivery o f this prospectus nor any sale made in
connection with this prospectus shall, under any circu mstances, create any implication that there has been no change in our a ffairs since the
date of this prospectus or that the information contained by reference to this prospectus is correct as of any time after its date.




                                                                         3
                                                         PROSPECTUS S UMMARY

The followi ng summary highlights selected information contai ned i n this pros pectus. This summary does not contain all the
informati on you shoul d consider before investing in the securities. Before making an investment decision, you shoul d read the entire
pros pectus carefully, includi ng the "RIS K FACTORS" section, the financi al statements and the notes to the financial statement s. As
used throughout this pros pectus, the terms "Pi mi", "Company", "we," "us," or "our" refer to Pi mi Agro CleanTech, Inc.

Organization

Pimi Agro CleanTech, Inc. is a Delaware Co rporation with one operating subsidiary, Pimi Agro CleanTech, Ltd, which is an Isra eli Limited
Co mpany (“Pimi Israel”). The Co mpany was formed on April 1, 2009, under the laws of the State of Delaware, and its subsidiary Pimi Israel
was formed on January 2004 in the State of Israel under the name "Pimi Marion Hold ings Ltd.", and has since changed its name to "Pimi Agro
Cleantech Ltd.", on October 2008. The Co mpany, through Pimi Israel, o wns a patented technology for the treat ment of pre an d p ost harvest of
fruits and vegetables utilizing environ mentally friendly products.

On April 27, 2009 we purchased all the issued shares of Pimi Israel fro m the Pimi Israel shareholders in consideration for 6,313,589 shares of
Co mmon Stock of the Co mpany to the Pimi Israel shareholders. As a result, Pimi Israel became a wholly owned subsidiary of t he Co mpany.

In December 2005, Pimi Israel purchased all of the outstanding shares of Optigu ide Hu mid ity Control Ltd. ("Optiguide"). Optiguide w as at the
time of its purchase, an Israeli co mpany that engaged in the development, assembly and market ing of hu mid ity control syst ems. At the time, the
Co mpany’s strategy was to develop an integrated product based on the Optiguide fogging delivery systems and the Company ’s formula. On
April 30, 2007 Pimi Israel co mpleted the sale of Optiguide. For fu rther info rmation, p lease see Note 14 to our Financial Statements.

We are a development stage business and have had limited revenues since our formation. There is currently no public market for our common
stock. As with any investment, there are certain risks involved in this offering. All potential investors should consult their own tax, legal and
investment advisors prior to making any decision regarding this offering. The purchase of our shares is highly speculative and involves a h igh
degree of risk, including, but not necessarily limited to, the “Risk Factors” described herein on page 8. Any person who cannot afford the loss
of their entire investment should not purchase our shares.

The Co mpany’s principal executive offices are located at 269 South Beverly Drive suite 1091, Beverly Hills California 90212, and its
telephone number is (310) 203-8278.

Business

Pimi was established in 2004 to develop and sell environ mentally friendly alternative solutions to current methods for pre and post harvest
treatments of fru its and vegetables. Current methods in practice use residue of harmfu l chemical pesticides. Pimi Israel and its Co- founder, Mr.
Nimrod Ben Yehuda, have invested many years of research in developing eco-friendly solutions; the company’s technology platform is based
on a unique and patented formu lation of Stabilized Hydrogen Pero xide (“STHP”) for the treat ment of fru its and vegetables. Pimi has also
developed a controlled distribution system to apply its solution while maintaining hu mid ity at the highest required levels in storage rooms
utilizing advanced technology to create micro d roplets, in accordance with a special wo rking protocol developed by Pimi.

Pimi is addressing the immediate need for developing treatment and season -long harvest storage that is chemical-free and environmentally
friendly. As of the date of the filing of this registration statement, Pimi is focusing on the treatment of potatoes, which is the second largest
stored crop world-wide (after grains), and is therefore Pimi’s first sales target.

The market for Pimi’s products is divided into two sections: (i) stored potatoes (for both table and processed potatoes), where Pimi ’s products
prevent quality losses due to sprouting and diseases, and (ii) the market of seeds potatoes where our products aim to prevent diseases and
pathogens.

Our website is located at http://www.pimiagro.co m . The content of our website and the websites referenced through out this Prospectus are not
part of this Prospectus.




                                                                        4
                                                                The Offering

Co mmon stock outstanding before the offering           6,398,917

Co mmon stock offered by selling stockholders           Up to 405,703 shares.

                                                        The maximu m nu mber of shares to be sold by the selling stockholders, 405,703
                                                        represents 6.4% of our current outstanding stock.

                                                        The selling stockholders will o ffer their shares at $1.35 per share until the
                                                        Co mpany’s shares are quoted on the OTC Bulletin Board and, assuming we secure
                                                        this annotation, thereafter at prevailing market prices or privately negotiated prices .

Co mmon stock to be outstanding after the offering      Up to 6,398,917 shares

Use of proceeds                                         We will not receive any proceeds fro m the sale of the co mmon stock. See "Use of
                                                        Proceeds" for a complete description.

Risk Factors                                            The purchase of our common stock involves a high degree of risk. You should
                                                        carefully review and consider "Risk Factors" beginning on page 6.

Forward-Looking Statements                              This prospectus contains forward-looking statements that address, among other
                                                        things, our strategy to develop our business, projected capital expenditures, liqu idity,
                                                        and our development of additional revenue sources. The forward -looking statements
                                                        are based on our current expectations and are subject to risks, uncertainties and
                                                        assumptions. We base these forward-looking statements on informat ion currently
                                                        available to us, and we assume no obligation to update them. Our actual results may
                                                        differ materially fro m the results anticipated in these forward-looking statements, due
                                                        to various factors.




The above information regarding co mmon stock to be outstanding after the offering is based on 6,398,917 shares of common stoc k outstanding
as of June 30, 2009.



                                                                      5
                                                               RIS K FACTORS

You should carefully consider the risks described below as well as other information provided to you in this document, inclu d ing information
in the section of this document entitled “Info rmation Regarding Forward Looking Statements.”. If any of the fo llo wing risks actually occur, the
Co mpany’s business, financial condition or results of operations could be materially adversely affected, the value o f the Co mpany co m mon
stock could decline, and you may lose all or part of your investment.

Risks Related to Our Business and Industry

Our i ndependent auditors have expressed doubt about our ability to continue our activities as a going concern, which may hind er our
ability to obtain future financing.

Since we have been focused on developing our propriety technology for availability of co mmercializat ion, we have suffered rec urring losses
fro m operations. The continuation of our co mpany as a going concern is dependent upon our company attaining and maint aining profitable
operations and raising additional capital. The financial statements do not include any adjustment relating to the recovery an d classification of
recorded asset amounts or the amount and classification of liab ilit ies that might be necessary should our company discontinue operations.

Due to the uncertainty of our ab ility to meet our current operating expenses and the capital expenses noted above, in their r eport on the annual
financial statements for the years ended December 31, 2008, 2007 and 2006, our independent auditors included an exp lanatory paragraph
regarding the doubt about our ability to continue as a going concern. Our financial statements contain additional note disclo sures describing the
status of the company.

The continuation of our business is dependent upon us raising additional financial support. The issuance of additional equity securities by us
could result in a significant/substantial dilution in the equity interests of our current stockholders. Obtaining co mmercial loans, assuming those
loans would be availab le, will increase our liabilities and future cash commit ments. If the Co mpany should fail to continue as a going concern,
you may lose the value of your investment in the Co mpany.

We have a limited operating history upon which to base an investment decision .

Our operating subsidiary, Pimi Israel, was formed in January 2004 and we have only recently begun selling of our products. We have a limited
operating history as a company. As a result, there is very limited historical performance upon which to evaluate our prospects for achieving
our business objectives. Our prospects must be considered in light of the risks, difficult ies and uncertainties frequently encountered by
development stage entities.

We will need significant additional capital, which we may be unable to obtain .

Our cap ital requirements in connection with our research and development activ ities and transition to co mmercial operation s h ave been and
will continue to be significant. We will require additional funds to continue research, development and testing of our technologies and
products, to obtain intellectual property protection relating to our technologies when appropriate, and to market our products. There can be no
assurance that financing will be available in amounts or on terms acceptable to us, if at all. There is no assurance additional funds will be
available fro m any source; or, if availab le, such funds may not be on terms acceptable to the Co mpany. In either of the aforementioned
situations, the Co mpany may not be ab le to fully imp lement its growth plans. Moreover, we will not receive any proceeds fro m the sale of
stock by our selling stockholders, and thus this offering will not affect our ability to meet capital requirements. Additionally, we have not been
legally able to undertake any financing efforts, other than some short term debt financing effort, while our Reg istration is pending.

In order to continue our operations, without expanding our activities we estimate that we will need min imu m capital in the sum of $0.8 M illion
in 2009 (out of which we have raised already $0.255 M illion) and the sum of $0.8 Million in 2010.

We expect to face significant competition from other companies looking to develop or acquire new alternative environment-friendly
solutions for the treatment of fruits a nd vegetables .

We expect to face significant co mpetition in every aspect of our business, and particularly fro m other co mpanies that seek to enter our market .
As regulators are pushing to move away fro m current residue chemical solutions, such as Chlorophenyl Isopropyl Carbamate also known as
Chlorpropham or CIPC (“CIPC”), existing suppliers of these solutions are an xiously looking to develop or acquire new alternative
environment-friendly solutions that can sustain their market share and revenue streams or to enable the continuance of CIPC at current le vels in
new ways of treat ment. Additionally, as market opportunity becomes eminent, co mpetitors and new playe rs will most likely attempt to develop
similar o r co mparable solutions. Although Pimi believes its technology is unique, is well protected, and will provide it with a significant
competitive barrier, it is nevertheless possible that superior or more cost -effective alternative technology will emerge that will achieve greater
market acceptance and render Pimi’s products less competitive. Furthermo re, existing vendors can cooperate to combat new players by
reducing market prices and marg ins or other competitiv e in itiat ives. The future success of Pimi will therefore depend, to a large extent, upon
the company’s ability to achieve market acceptance of its innovative solutions as well as develop and introduce new products and
enhancements to existing products. No assurance can be given that the Company will be able to co mpete in such a market p lace.

We have incurred significant losses to date and expect to continue to incur losses.

During the year ended December 31, 2008, we incurred net losses of $602,994. In t he three months period ended March 31, 2009 we incurred
net loss of $219,428 .Since we have started our operation in 2005 and until March 31, 2009 we incurred accu mulated losses of $2,218,605. We
expect to continue to incur losses for the fiscal years ended December 31, 2009 and December 31, 2010. Continuing losses will have an
adverse impact on our cash flow and may impair our ab ility to raise additional capital required to continue and expand our op erations.

                                                                        6
We are dependent upon our Managers for the operating of the Company .

The Co mpany is dependent upon the services of its management to determine and imp lement the overall focus and strategy of the
Co mpany. Furthermo re, the Co mpany is dependent upon the Managers to oversee the operations of Pimi and Pimi Israel. Thus, there can be
no assurance that the Managers ’ experience will be sufficient to successfully achieve the business objectives of the Compan y. All decisions
regarding the management of the Co mpany’s affairs will be made exclusively by the Officers and Directors of the Co mpany. In the event these
persons are ineffective, the Co mpany’s business and results of operation would likely be adversely affected.

Our success is dependent upon our ability to achieve regulatory approvals in the U.S. and abroad .

A critical key to our success and ability to expand our business is our ability to obtain regulatory approvals in the Eu ropean Union and United
States for the use of our products in these countries and also in other countries. The regulatory approvals are dependant on trials to show the
efficacy or the non to xicity o f our products. Such trial might take longer period than expected and it might delay obtaining such regulatory
approvals or might cause delay in starting operation on a large scale in these countries and jurisdictions.

Our success is dependent upon our ability to achieve market acceptance
In order to ach ieve high volu me sales, and attain a leading market sha re and become the new standard of treat ment, the Co mpany ’s
SpuDefender TM and other products must not only be approved by the regulators but also endorsed by the major potato food processors, retaile r
of fruits and vegetables as well as the organic food an d environ ment organizations. Pimi is aware of this key factor and is focusing on
conducting large scale trials with majo r food processors and retail supplier of table potatoes in several countries, in order to show the efficacy
of the Spudefender TM and our technology and to receive the recognition of the industry, but no assurances can be made that we will succeed in
such endeavor and how long it will take until we shall receive market recognition.

Our products and technology are still in development stage and require additional trials and development

Our products and technology have been tested in numerous trials, main ly in Israel, which is a hot climate country and on vege tables varieties
which are grown in hot climate as well as storage rooms with refr igerat ion. Trials conducted in Europe during the last potato season in cold
weather conditions demonstrated that we need to make some adjustments to our storage protocol main ly because of these weather conditions.
These adjustments may require additional trials and may delay the commercialization of our products and technology.

We rely on our Technologies to successfully develop and market new and existing products.

Our product has been tested in mu ltip le small scale tests. As of the date of filing of this reg istration statement, is curren tly undergoing five large
scale field trials in the United Kingdom, Germany and the Ukraine with leading food processors and retailers in such countries. It is possible
that the results fro m these large scale tests may show lower efficacy than tests conducted previously, and may require some p roduct
improvements as well as possible changes in the application and storage protocol. Thes e factors may significantly delay our product’s
introduction to market. Likewise, we cannot be sure these products will be co mmercially v iable, and have no assurances that w e will be able to
expand upon our current product offerings or that any such expans ion will result in revenues to the company.

We rely on rapidly establishing a global distributorship network in order to effectively market our products .

Pimi, through its wholly owned subsidiary, has developed init ial partnerships with local distributors in Europe. In order to expand sales and
market ing globally, and capture a lead ing market share before any potential reaction fro m the co mpetition, Pimi will need t o rapidly e xpand
geographically and establish a global d istribution network. Th is is likely to put pressure on management, financial and opera tional resources of
the Company. In order to mit igate this factor, once Pimi establishes a significant presence in the market , it will proceed to establish strategic
OEM partnerships with some of the leading players in the market, however, there are no assurances that we will succeed in est ablishing such
partnerships, which may harm the marketing of our p roduct and the development of our business.

Our inability to attain and protect intellectual property rights could reduce the value of our products, services and brand.

Patents and pending patents, trademarks, trade secrets, copyrights and other intellectual property rights ma y be important assets for us. Various
events outside of our control pose a threat to our ability to attain or protect intellectual property rights as well as to ou r products and services.
For examp le, effective intellectual property protection may not be available in every country in wh ich our products and services are distributed.
Also, the efforts we have taken to protect our proprietary rights may not be sufficient or effect ive. Any significant impairment of our ability to
attain or protect our intellectual p roperty rights could harm our business or our ability to co mpete. Also, protecting intellectual property rights
is costly and time consuming. Any increase in the unauthorized use of our future intellectual p roperty could make it more exp ensive to do
business and harm our operating results. In addition we do not have patents in India, Ukraine and Belarus, which are major potato producing
countries; this could negatively affect our ab ility to protect our intellectual p roperty in these countries and therefore reduce the value of our
products, services and brand.


                                                                           7
Our success is dependent upon the acceptance of environment-friendly storage solutions for fruits and vegetables.

The future of the co mpany is dependent upon the acceptance of environment-friendly, non-residue storage solutions for as well as the objection
to genetically modified, fruits and vegetables. Although this appears to be the direction the market is going in the coming y ears, these trends as
well as the future size of this market, and other potential markets for the Co mpany ’s products, depend upon a number of factors, many of which
are beyond the control of the Co mpany. For examp le, failure to receive regulatory approvals or failure to convince retailers or food processors,
to bear additional cost for residue free fru it and vegetables, failure to convince the consumers to purchase residue free fru its an d vegetables for
higher prices, could have adverse effects on Pimi’s business, financial condition, operating results and cash flow go ing forward.

Our operating results may fluctuate, which makes our results difficult to predict and could cause our results to fall short o f expectations.

Our operating results may fluctuate as a result of a nu mber of factors, many outside of our control. As a result, co mparing our operating results
on a period-to-period basis may not be mean ingful, and you should not rely on our past results as an indication of our future p erformance. O u r
quarterly, year-to-date and annual expenses as a percentage of our revenues may d iffer significantly fro m our historical or pro jected rates. Our
operating results in future quarters may fall below expectations. Any of these events could cause our stock price to fall, in the event it becomes
listed on the OTCBB. Each of the risk factors listed in the section Risk Factors, and the following factors may affect our op erating results:

•      Our ability to attract users for our products.

•      Our ability to generate revenue from our products.

•      The amount and timing of operating costs and capital expenditures related to the maintenance and expansion of our businesses,
       operations and infrastructure.

•      Our focus on long-term goals over short-term results.

•      Our ability to keep our testing programs operational at a reasonable cost and without service interruptions.

•      Global economic situation.

•      Fluctuations in weather conditions.

•      The seasonal nature of our business.


Our business depends to some extent on international transactions.

As a consequence of the international nature of Pimi’s business, the company is exposed to risks associated with changes in foreign currency
exchange rates. A majority of the co mpany’s revenues and substantially all of its cost of sales are in USD or Euros, whilst our management,
market ing, sales and R&D cos ts are in NIS. The Co mpany is therefore exposed to foreign currency risk due to fluctuations in exchange rates.
This may result in gains or losses with respect to movements in exchange rates, which may be significant and may also cause f luctuations in
reported financial in formation that are not necessarily related to the Co mpany ’s operating results.

We operate in developing countries which are affected seriously by the global economic crisis.

Among other countries we are currently operating in developing countries such as Ukraine and we intend to operate in other developing
countries which are largely affected by the current global economic crisis. This may affect our ability to expand our operations and to achieve
our sales target in these countries.

The dangers inherent in production and transportation of Hydrogen Peroxide could cause disruptions and could expose us t o potentially
significant losses, costs or liabilities.


Pimi's operations are subject to significant hazards and risks inherent in transporting of the active ingredient of our Produ ct- Hydrogen
Pero xide. In h igh concentrations, Hydrogen Pero xide is an aggressive o xidizer and will corrode many materials. High co ncentrations of H2O2
will react violently. Hydrogen Peroxide should be stored in a cool, dry, well -ventilated area and away from any flammable or combustible
substances. It should be transport in special tanks and vehicles and should be stored in a contain er composed of non-reactive materials. These
hazards and risks include, but are not limited to, fires, exp losions, third-party interference (including terroris m) and mechanical failure of
equipment at Pimi’s or third-party facilities. The occurrence of any of these events could result in production and distribution difficulties and
disruptions, personal in jury or wrongful death claims and other damage to properties.
8
Risks Related to our Location in Israel

Conditions in Israel may limit our ability to manage and market our products, which would lead to a decrease in revenues.

Because part of our operations is conducted in Israel and our management is located in Israel, our operations are direct ly affected by economic,
political and military conditions affecting Israel. Specifically, we could be adversely affected by:

              any major hostilit ies involving Israel;

              risks associated with outages and disruptions of communications networks due to any hostilities involving Israel; and

              a significant downturn in the economic or financial conditions in Israel.

Since the establishment of the State of Israel in 1948, a nu mber of armed conflicts have taken place between Israel and its A rab neighbors and a
state of hostility, varying in degree and intensity, has led to security and economic problems fo r Israel. Despite negotiations to effect peace
between Israel and its Arab neighbors, the future of these peace efforts is uncertain. Since October 2000, there has been a significant increase in
violence, civil unrest and hostility, including armed clashes between the State of Israel and the Palestinians, and acts of terror have been
committed inside Israel and against Israeli targets in the West Bank and Gaza Strip. In addition, the recent armed conflict w ith Hezbollah on
the northern border of Israel and extremists groups in the southern region may negatively affect business conditions in Israe l. There is no
indication as to how long the current hostilities will last or whether there will be any fu rther escalation. Any further escalation in these
hostilit ies or any future conflict, political instability or violence in the region may have a negative effect on our busines s, harm our results of
operations and adversely affect our share price.

Furthermore, there are a nu mber of countries that restrict business with Israel or with Israeli co mpanies, which may limit ou r ability to pro mote
our products and services in those countries.

We may not be able to enforce covenants not-to-compete under current Israeli law that might result in added competition for our products.

We have non-competition agreements with all of our emp loyees, all of which are governed by Israeli law. These agreements prohibit our
emp loyees from co mpeting with or working for our co mpetitors, generally during and for up to 6 months after termination of their
emp loyment. However, Israeli courts are reluctant to enforce non -compete undertakings of former employees and tend, if at all, to enforce
those provisions for relatively brief periods of time in restricted geographical areas and only when the employee has obtained unique value to
the employer specific to that emp loyer’s business and not just regarding the professional development of the emp loyee. If we are not able to
enforce non-compete covenants, we may be faced with added competition.

It will be extremely difficult to acquire jurisdiction and enforce liabilities against our officers and directors who are based in Israel.

The majo rity of our officers and present directors reside outside of the United States and most of our operations at the time of the filing of th is
registration statement are located outside the United States. As a result, it may not be possible for United States investors to enforce their legal
rights, to effect service of process upon our directors or officers or to enforce judgments of United States courts predicated upon c ivil liabilities
and criminal penalties of our d irectors and officers under Federal securities laws. Moreover, we have been advised that Israel does not have
treaties providing for the reciprocal recognition and enforcement of judgments of courts with the United States. Further, it is unclear if
extradition treaties now in effect between the United States and Israel would permit effec tive enforcement of criminal penalties of the Federal
securities laws.

Risks Related to this Offering .

The Company arbitrarily determined the offering price and terms of t he Shares offered through t his Registration Statement

The price of the Shares has been arbit rarily determined and bears no relationship to the assets or book value of the Co mpany, o r other
customary investment criteria. No independent counsel or appraiser has been retained to value the Shares, and no assurance can be made that
the offering price is in fact reflective of the underlying value of the Shares offered hereunder. Each prospective investor is therefore urged to
consult with his or her own legal counsel and tax advisors as to the offering price and terms of the Shares offered hereunder.

The Shares are an illiquid investment as t here is presently no market for our Shares, and transferability of the Shares is su bject to
significant restriction .

There is presently no market for the shares, and we cannot be certain that a public market will become available, or that there will be sufficient
liquid ity to allo w for sale or transferability of the shares within the near future. Therefore, the purchase of the Shares must be considered a
long-term investment acceptable only for prospective investors who are willing and can afford to accept and bear the substantial risk of the
investment for an indefinite period of time. There is not a public market for the resale of the Shares. A prospective investor, therefore, may not
be able to liquidate its investment, even in the event of an emergency, and Shares may not be acceptable as collateral for a loan.

Because We May Be Subject To The “Penny Stock” Rules, You May Have Difficulty In Selling Our Common Stock.

If a public market develops for our co mmon stock and our stock price is less than $5.00 per share, our stock may be subject to the SEC ’s penny
stock ru les. These rules impose additional sales practice requirements and restrictions on broker -dealers that sell our stock to pers ons other
than established customers and institutional accredited investors. The application of these rules may affect the ability of b roker-dealers to sell
our common stock and may affect your ability to sell any co mmon stock you may own. According to the SEC, the market for penny stocks has
suffered in recent years fro m patterns of fraud and abuse. Such patterns include:

• Control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;
• Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;
• “Boiler roo m” practices involv ing high pressure sales tactics and unrealistic price pro jections by inexperienced salespersons;
• Excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and
  The wholesale dump ing of the same securit ies by promoters and broker-dealers after prices have been manipulated to a desired level, along
•
  with the inevitable collapse of those prices with consequent investor losses.

If we are subject to penny stock rules, you may have difficulty selling your shares of our common stock.




                                                                        9
                                                    FORWARD-LOOKING S TATEMENTS

Some of the statements contained in this Registration Statement that are not h istorical facts are "forward -looking statement s" which can be
identified by the use of terminology such as "estimates," "projects," "plans," "believes," "expects," "anticipates," "intends," or the negative or
other variations, or by discussions of strategy that involve risks and uncertainties. We urge you to be cautious of the forwa rd-looking
statements, that such statements, which are contained in this Registration Statement, ref lect our current beliefs with respect to future events and
involve known and unknown risks, uncertainties and other factors affecting our operations, market growth, services, products and licenses. No
assurances can be given regard ing the achievement of future results, as actual results may d iffer materially as a result of the risks we face, and
actual events may differ fro m the assumptions underlying the statements that have been made regarding anticipated events. Fac tors that may
cause actual results, our performance or ach ievements, or industry results, to differ materially fro m those contemplated by such
forward-looking statements include without limitation:

   •          our ability to attract and retain management;

   •          our growth strategies;

   •          anticipated trends in our business;

   •          our future results of operations;

   •          our ability to make o r integrate acquisitions;

   •          our liquidity and ability to finance our acquisition and development activities;

   •          the timing, cost and procedure for proposed acquisitions;

   •          the impact of government regulat ion;

   •          estimates regarding future net revenues;

   •          planned capital expenditures (including the amount and nature thereof);

   •          estimates, plans and projections relating to acquired properties;

   •          our financial position, business strategy and other plans and objectives for future operations;

   •           the possibility that our acquisitions may involve unexpected costs;

   •           competition;

   •           the ability of our management team to execute its plans to meet its goals;

   •           general economic conditions, whether internationally, nationally o r in the regional and local market areas in which we are doin g
               business, that may be less favorable than expected; and

   •           other economic, co mpetit ive, governmental, legislative, regulatory, geopolitical and technological factors that may negatively
               impact our businesses, operations and pricing.

All written and oral fo rward-looking statements made in connection with this Fo rm S-1 that are attributable to us or persons acting on our
behalf are expressly qualified in their entirety by these cautionary statements. Given the uncertainties that surround such s tatements, you are
cautioned not to place undue reliance on such forward-looking statements.

                                                                US E OF PROCEEDS

This prospectus relates to shares of our co mmon stock that may be offered and sold fro m time to t ime by the selling stockholders. We will not
receive any proceeds from the sale of shares of common stock in this offering.

                                                  DETER MINATION OF OFFERING PRICE
The pricing of the Shares has been arbitrarily determined and established by the Company. No independent accountant or appraiser has been
retained to protect the interest of the investors. No assurance can be made that the offering price is in fact reflective of the un derlying value of
the Shares. Each prospective investor is urged to consult with his or her counsel and/or accountant as to offering price and the terms and
conditions of the Shares. Factors to be considered in determining the price include the amount of capital expected to be requ ired, the market for
securities of entities in a new bus iness venture, projected rates of return expected by prospective investors of speculative investments, the
Co mpany’s prospects for success and prices of similar entit ies.

                                                                   DILUTION

Not applicable. We are not offering any shares in this registration statement. All shares are being registered on behalf of our selling
shareholders.

                                                                         10
MANAGEMENT’S DISCUSS ION AND ANALYS IS OR PLAN OF OPERATION

Background

Pimi Israel was established in 2004 with a vision towards developing environmentally friendly and organic alternative solutio ns to current
chemical treat ments of agricultural harvest, such as fruits, vegetables and grains, thereby imp roving the well -being of consumers, growers and
the environment. Pimi Israel has devoted significant research in developing environ mentally friendly solutions for pre and post harvest
treatments of fruits and vegetables. The company's technology is based on a unique, patented formu lation of Stabilized Hyd rog en Pero xide,
combined with a controlled distribution system used to apply it, as well as to maintain h u midity at optimal levels in storage rooms.

On April 27, 2009 we purchased all the issued and outstanding shares of Pimi Israel fro m Pimi Israel ’s shareholders in consideration for
6,313,589 shares of our Co mmon Stock (the “ Exchange Agreement"). As a res ult, Pimi Israel became a wholly-owned subsidiary of the
Co mpany.

Pimi is addressing the immed iate need of minimizing crop loss during season -long harvest storage using treatments that are environmentally
friendly. Current industry treatments are based on harmfu l chemicals that are gradually being banned by regulatory bo dies throughout the
world. Due to the magnitude of this unsolved problem and the enormous impact of a long -awaited solution in the global agricultural industry,
management believes that Pimi is positioned to become a leading co mpany in this field.

Overview

The Co mpany focuses on developing environmentally friendly solutions for extending storability of vegetables and fruits. The Co mpany is
currently in the research and development stage. To date, the Company is developing three products and has started t he commercialization of
two of its products: SpuDefender and StoreGuard.

Currently, the Co mpany is focused on solutions related to the potato industry. Potatoes are the second largest crop (after gr ain) worldwide. The
world market for potatoes is estimated at appro ximately 325 million tons, of wh ich more than half are stored for an average period of five
months.

We primarily aim at treating and developing storage solutions for stored potatoes utilized by consumers, as well as seed potato tubers, which
are the raw material used for growing potatoes. SpuDefender is aimed at preventing quality losses due to sprouting and diseases for stored
potatoes (table and processed), and SeedGuard is aimed at preventing diseases and pathogens in seed potatoes. In additio n, the Co mpany has
developed StoreGuard, which increases storability, reduces quantity and quality losses for fruits and vegetables, such as cab bage, cauliflower
and broccoli. The Co mpany has completed the development of the StoreGuard storage protocol fo r cabbage and broccoli in the United
Kingdom, which is currently being sold in the UK in connection with the storage of these vegetables.

All o f our products are based on Stabilized Hydrogen Pero xide ("STHP"), which has the ability to reduce a wide range of pathogen and
diseases, as well as to control sprouting. STHP breaks -down after usage into water and oxygen while the stabilizers are washed away.
Accordingly, our products are environmental friendly.

SpuDefender TM

SpuDefender has been developed specifically for the treat ment of potatoes in storage. Spudefender is aimed at rep lacing Isopropyl
N-(3-chlorophenyl) Carbamate ("Chlorpropham" or "CIPC") as a sprout inhibitor, while increasing shelf life and preventing quality reduction.
In addition, SpuDefender aims to prevent dehydration and quantity losses.

Currently, the primary method to control sprouting in storage is with post harvest applications of CIPC. Chlorpropham is a ve ry effective
chemical used for the treatment of potato sprouting, but at the same time produces high residue. The new trend towards reducing chemicals in
food consumption and the demand led by environmental and health awareness campaigns has also been adopted by the regulators, as well as
the retailers and the mult inational p layers in potato products such as PepsiCo/Frito -Lay. Maximu m residue levels permitt ed for usage of
pesticide fo r the treat ment of fru its and vegetables post-harvest, including Chlorpropham, have and continue to be reduced. This has resulted in
the reduced usage of such chemicals in developed countries, such as the EU countries and in the United States. In Sweden, CIPC has been
banned since 2005.

In addition, it is also common for diseases to develop in stored potatoes. SpuDefender is able to reduce losses caused by dis ease. Based on
meet ings and discussions with food processing companies, farmers, research centers (such as the University of Maine), growers organizations
(such as the Brit ish Potato Council (" BPC"), and independent research institutions, Management believes that there is cu rrent ly no other
solution available, other than SpuDefender, that suppresses sprouting while at the same time preventing yield and quality looses.
The market for SpuDefender is d ivided into two sections: (i) stored table potatoes and (ii) stored processed potatoes (for cr isps and French
fries). Pimi’s SpuDefender is targeted at storage facilit ies that are either owned by farmers, or independent storage providers, or are ow ned by
the food manufacturers.

SpuDefender will be manufactured at So lvay or another chemical manufacturer und er Pimi’s private label. We intend to enter into agreements
with distributors, who will sell SpuDefender to end-user.

After several years of research and development, Pimi has embarked on co mmercializat ion of SpuDefender. In 2008 Pimi conducte d pilot tria ls
with major g rower and storage providers of potatoes for table potatoes and processed potatoes in England, Ukraine and Germany . Following
those pilots, the Company has continued the development of the formula and the storage protocol in order to adjust it to the specific storage
facilit ies and the weather conditions in Europe. All of the customers and partners of these trials (most of whom are lead ing companies in the
food processing industry and suppliers for wholesalers) exp ressed willingness to extend the trials in the co ming potato season.

In the United States, Pimi presented (under the label Vegiesafe) the new concept of CIPC -free potatoes and potato-related products, such as
chips and French fries, to several major retailers and food chains. These p resentations started in the first quarter of 2009, following
consummation of our jo int venture with Veg iesafe LLC. As a result, we have been requested to perform efficacy trials with sto rage providers.
If these trials exh ibit efficacy, management anticipates that the retail leaders will launch Veg iesafe potatoes or potato -related products and will
ask their suppliers to supply them with potatoes and potato-products free fro m Chlorpropham .

Given recent trends, and feedback received fro m the market, manage ment believes there is a great opportunity for replacing residue chemicals
with environ mentally friendly solutions such as Spudefender. Management sees special opportunity in the trend adopted by regu lators to reduce
Chlorpropham consumption levels, which may cause potato storage providers to seek out substitute products. Fro m nu merou s meetings with
industry professionals, we have found that there is strong demand by costumers seeking such substitute products.

Currently, a hindering factor to co mmercialization of the Co mpany’s products is the attain ment of regulatory registration and approval in each
of the countries where the Co mpany’s product will be delivered and used. These are costly and lengthy procedures which the Co mpany has
initiated this year. However, there is a material risk that if this regulatory process will take mo re than anticipated (which, as of the date of the
filing of this registration statement, is anticipated to be twelve months until receipt of temporary permits in the EU member states, and six to
nine months in the United States), it may postpone the commercialization of our p roduct and the revenues which we expect to d erive fro m
sales, specially due to the seasonal nature of our business.

The Co mpany sees challenges in competing with the manufacturers and distributors of CIPC-products, which currently control the market in
Europe and the US. After having discussions with potential customers in the U.S., we found that although SpuDefender ’s price will be higher
than CIPC, these customers expressed willingness to purchase our product for its added value. Therefore we believe that competition will not
be entirely price -driven and that the main factors affecting competition will include the ability to apply a non -residue active ingredient and to
successfully treat crops against sprouting, while at the same t ime preventing quality and quantity losses.


In order to differentiate its products, the Company has entered into a joint venture with Vegiesafe LLC, which launched the Vegiesafe
consumer brand, marking residue-free fruits and vegetables in the U.S.

In addition to the above, further challenges faced by us include co mp letion and develop ment of the SpuDefender storage protoc ol. Th is
protocol must be adjusted to the storage method in each region of the world, such that the quality will match customer demands in sprout
control. The Co mpany is undertaking steps in order to reduce these uncertainties and risks by performing trials and pilot roo ms with storage
facility owners, and by adjusting the formu la and the usage protocol in order to show efficacy of SpuDefender in such storage facilities.

SeedGuard TM

Potato seed tubers are susceptible to a variety of diseases that lower yields and tuber quality. Pathogens accumulate in succ essive cloning of
tubers and in the soil used to grow them. Sustainable potato production depends on a constantly renewed supply of disease -free planting
material. According to numerous international regulat ions, seeds, of all types, must be disinfected to prevent the transfer of diseases between
countries, between seeds, fro m seeds to soil, and fro m seeds to crop. Industrial seeds are ext remely expensive, and there are few effective seed
disinfectants; the most common are Celest, Monceren, Mancozed. At the moment t here is no one chemical which treats all pathogens and
diseases and the growers usually imp lement a variety of chemicals.

The Co mpany is developing SeedGuard TM , wh ich is aimed at treating seed potatoes in storage against disease and pathogens. Seed Guard is
designed to provide added-value to the seed producer owing to its long lasting disinfectant effect, versus existing aggressive chemical
treatments which are not environ mental friendly solutions.
Management sees an opportunity in the development of a chemical which is environmentally friendly, and which could substitute the current
mu lti-chemical treat ment against pathogens and diseases of potato seed tubers . The current treatment against pathogens and diseases are very
costly and could amount to over $100 per ton of potato seed tubers per season. Management sees an opportunity in developing a nd selling a
product that will match market price and has potentially added value versus current chemicals. In addition, there are several diseases with no
treating solution, and diseases and pathogens which have developed resistant mutations against current chemicals and treatmen ts. Growers of
these seed tubers are seeking solutions, and management anticipates that such growers will purchase a premiu m product at high end cost in
order to solve these diseases.

In the case of SeedGuard, management faces the challenge of developing one chemical which is environmentally -friendly and which can treat
potato seed tuber throughout their lifecycle, and thereby substitute several chemicals. To date, to the best of management ’s understanding, no
such other chemical exists. Management expects that it will take several seasons to pene trate the market and to attain a clientele of growers to
utilize Seed Guard, and therefore there is a risk of delay in receiving revenues fro m sales of this product. In addition, as S eed Gu ard is still in the
development stages, management sees uncertainty in the successful completion of the development of a product which can treat all pathogens
and diseases throughout all stages of storage of the seed tubers. Moreover, the Co mpany has yet to undertake registration of SeedGuard in those
countries in which it will be used.

As of the date of this registration statement, the Co mpany is engaged in trials in Israel, Germany and the United Kingdom in o rder to show the
efficacy of Seed Guard against a variety of diseases. The trials will take place fro m August 2009 u ntil Ju ly 2010.

StoreGuard TM

StoreGuard TM is designed to extend crop storability duration and increase yield and quality in the storage of fruits and vegetables by add ressing
the issues surrounding crop skin diseases and their hydration. Management believes this is the first time that storage pro viders of fruits and
vegetables have been exposed to the ability to extend shelf life in storage. Thus, management is not able to point to any oth er solution in the
market which co mpetes with StoreGuard.

Accordingly, Management believes it has identified an opportunity to provide farmers with a product which will extend storage duration and
will be advantageous to farmers and growers in the develop ment of fruits and vegetables post season.

The Co mpany has yet to undertake registration of StoreGuard in tho se countries in which it will be used. Further, Management will be required
to educate the market as to this product and the solutions it can afford farmers and growers of fru its and vegetables.

                                                                           11
Plan of Operati on and Fi nancing Needs

The Co mpany has sustained operating losses and its cash needs extend beyond its current resources. Subsequent to the third qu arter of 2009,
the Co mpany will exhaust most of its liquidity. In addition, the Co mpany does not have a reliable source of future funding. These factors create
an uncertainty about the Company’s ability to continue as a going concern.

As of the filing date of this registration statement, we have generated limited revenues from sales of our products to customers.

In order to co mp lete our R&D and to generate sales we will require funds in the sum of $1.2 million (out of wh ich we have already raised
$0.359 million as of June30, 2009) and $1.3 million in the years 2009 and 2010, respectively. We p lan to raise funds from Institutional
Investors and private investors in 2009 in the net amount of $3.3 Million. As of the date of the filing of this Registration s tatement, we have
introduce our Company and presented our business plan to several Institutional and private funds. Few of these in vestors are currently
evaluating a potential investment in our Co mpany. However, no defin itive agreements have been negotiated or signed to date.

Fro m January 2008 through April 2009, Pimi Israel engaged in a Private Placement in the aggregate amount of $1.194 Million which included
up to 2,279,354 Ordinary Shares of Pimi Israel for the average price of $0.525 per share, wh ich were exchanged for 2,279,354 shares of
Co mmon Stock of the Co mpany under the Exchange Agreement. Between May 2009 and June 2009, we have raised $114,000 in consideration
of the issuance of 85,328 shares of our Co mmon Stock, at an average price of $1.336. This financing allowed us to execute pilot treat ments of
storage rooms with our product and technology in the UK, Germany and the Ukraine, to begin marketing of our products and technology and to
advance the development of our products and technology.

As of the date of the filing of this registration statement, there is no expected purchase or sale of plant or significant eq uipment in the next 12
months. There are no planned significant changes in the number o f emp loyees over the next 12 months; however, if a contract t hat requires
significant staff increase is presented and executed, it may be necessary to hire additional employees.

As the storage season of potatoes in the northern hemisphere, where the Co mpany is currently active, starts in October of eac h year and ends
approximately in May/June the next year, Management expects that most of its revenues would be received it the f ourth quarter and the first
and second quarter of each year. As of the date of the filing of this registration statement, the Co mpany does not have enoug h data and
experience in order to determine how this would affect its results fro m operations, as it de pends on the commercial terms of the agreements the
Co mpany would enter into with its distributors and customers and the producer/suppliers of its products.

Results of Operations for the Year Ended December 31, 2008 compared to Year Ended December 31, 200 7 and to the Year Ended
December 31, 2006

Total Net Sales : Total Net Sales increased $88,849 or 564% to $104,612 in 2008 fro m $15,763 for 2007. Increase of revenue was derived
fro m sales of our products and technology to pilot storage rooms in order to show efficacy in the UK, Ukraine and Germany. The Co mpany’s
products and technology are still in development stage and have not been actively marketed to date. Total Net Sales decreased $13,691 or 46%
to $15,763 in 2007 fro m $29,454 for 2006.These decreas es in 2006 and 2007 were due to investments in pilot storage rooms for proving the
efficacy of our products, and the introduction of our product without generating substantial sales.

R&D Expenses : R&D Expenses for 2008 o f $515,154 increased $196,139 or 6 1% fro m the $319,015 in 2007, due to cost of the pilot storage
rooms we have installed in the UK, Ukraine and Germany and costs related to these pilot rooms such as travel expenses. R&D Expenses for
2007 of $319,015 decreased $132,989 or 29% fro m the $452, 004 in 2006, mostly due to R&D Grants received fro m the Chief Scientist –
Govern ment of Israel in the amount of $91,248 in 2007, in co mparison with no grants received in 2006.

General and Administrati ve Expenses : General and ad ministrative expenses decreased by $3,004 or 2% in 2008 to $187,032 fro m $190,036
in 2007. General and ad min istrative expenses increased by $39,218 o r 26% in 2007 to $190,036 fro m $150,818 in 2006, mostly du e to increase
in Professional fees expenses.

Loss from Operati ons : Loss from operations for 2008 o f $597,574 was up $104,286 or 21% fro m the loss from operations in 2007 of
$493,288 as a result of the growth in R&D expenses ($196,139) were part ially co mpensated by growth of sales ($88,849). Loss f rom
operations for 2007 of $493,288 was up $80,080 or 14% fro m the loss fro m operations in 2006 of $573,368 as a result of the reduction in R&D
expenses of $132,989 (mostly R&D Grants), were part ially balanced by growth of General and Admin istrative expenses of $39,218 (Mostly
Professional fees expenses), and decrease in sales of $13,691.

Financing Expenses : Total financing expenses in 2008 amounted to $5,420, which were $3,663 higher than our financing expenses of $1,757
in 2007. This was a result of higher net interest and bank expenses in 2008 than in 2007. Total financing expenses of $1,757 in 2007 were
$10,056 lo wer than our financing expenses of $11,813 in 2006, as a result of lower net interest and bank expenses in 2007 tha n in 2006.
    Net Loss : Net loss of $602,994 in 2008 was $261,541 or 77% mo re than the net loss in 2007 of $341,453. The net loss for 2007 was reduced
    due to income fro m discontinued operation (see note 14 to the Financial Statements). Net loss of $341,453 in 2007 was $489,96 2 or 59% less
    than the net loss in 2006 of $831,415. The net loss for 2007 was reduced due to income fro m d iscontinued operation at the amount of 153,592,
    The net Loss for 2006 was increased fro m discontinued operation at the amount of $246,234 (see note 14 to the Financial Statements ).

    Results of Operations for the 3 months Ended March 31, 2009 compared to 3 months Ended March 31, 2008

    Total Net Sales : Total Net Sales increased $6,896 or 286% to $9,306 in the 3 months ended March 31, 3009 fro m $2,410 for the 3 months
    ended March 31, 2008. Increase of revenue was derived fro m sales of our products and technology to pilots rooms in UK. The Co mpany’s
    products and technology are still in develop ment stage and have not been actively marketed to date.

    R&D Expenses : Total net R&D Expenses for the 3 month ended March 31, 2009 of $ 191,852 increased $127,945 or 200% from the $63,907
    for the 3 months ended March 31, 2008, due to increase in cost of labor and professional services in the amount of $86,949, t ravel and other
    expenses of $18,393 and decrease in R&D g rants of $22,603.

    General and Administrati ve Expenses : General and administrative expenses increased by $4,739 or 17% in the 3 months ended March 31,
    2009 to $32,832 fro m $28,093 in the 3 months ended March 31, 2008 mostly due t o increase in cost of labor and professional fee expenses.

    Loss from Operations : Loss fro m operations for the 3 months ended March 31, 2009 of $215,378 was up $125,788_or140% fro m the loss
    fro m operations in in the 3 months ended March 31, 2008 as a res ult of the growth in R&D expenses ($127,945) which were part ially
    compensated by growth of sales ($6,896).

    Financing Expenses : Total financing expenses in the 3 months ended March 31, 2009 amounted to $4,050, which were $3,189 h igher than
    our financing expenses of $861 in the 3 months ended March 31, 2008. Th is was a result of increase in bank expenses due to increase in
    activities and exchange rate.

    Net Loss : Net loss of $219,428 in the 3 months ended March 31, 2009 was $128,977 or 143% h igher than the net loss in the 3 months ended
    March 31, 2008 of $90,451 main ly due to increase in R&D expenses at the amount of $127,945.

    The following table presents certain financial data for the periods indicated. Our historical operating results are not neces sarily indicative of the
    results for any future period.

                                                                    Three month period
                                                                      ended March 31,                          Year ended December 31,
                                                                    2009              2008               2008            2007                 2006
                                                                         (unaudi ted)                                 (audited)
     Revenues                                                            9,306            2,410            104,612          15,763               29,454
Research and development expenses                                    (191,852 )         (63,907 )         (515,154 )      (319,015 )           (452,004 )
General and administrative expenses                                   (32,832 )         (28,093 )         (187,032 )      (190,036 )           (150,818 )
Operating loss                                                       (215,378 )         (89,590 )         (597,574 )      (493,288 )           (573,368 )
Financing expenses (income), net                                        (4,050 )           (861 )            (5,420 )        (1,757 )           (11,813 )
Loss from continuing operation                                       (219,428 )         (90,451 )         (602,994 )      (495,045 )           (585,181 )
Income (loss) fro m discontinued operation (in 2007
     includes capital gain on disposal of US$ 245,574), net                 -                  -                 -           153,592           (246,234 )
Net loss for the period                                              (219,428 )          (90,451 )        (602,994 )        (341,453 )         (831,415 )

    Management believes that the recent trend in increase of its revenues would not continue in the fiscal years 2009-2010, although it believes that
    in 2011 revenues will increase substantially. Th is projection is subject to the completion of the regulatory process of the registration of its
    Spudefender in the U.S. and the EU countries. Management believes the trend of increase in its costs will continue during the coming years and
    costs will increase at a higher rate, as the Company will expand its activities to the U.S. and to other regions of the world, and will expand its
    R&D activ ity and marketing activit ies to other products. Accordingly, management expects losses to continue in 2009 and 2010.




                                                                             12
Li qui di ty and Capital Resources

As of March 31, 2009, we had liabilities of $314,382 ($238,184 as of December, 2008), including $190,150 ($101,511 as of Dece mber 31,
2008) of third party liab ilit ies, and $124,231 ($136,673 as of December 31, 2008) was due to related parties. The amounts due to related
parties are for consulting services and salaries $74,329 ($86,000 as of December 31, 2008) and for services and reimbursement of expenses
relating to the company’s patents and patent applications $13,948 ($26, 000 as of December 31, 2008).

As of March 31, 2009 we have cash on hand in the sum of $284,244. Currently our net burn rate is appro ximately $75,000 per mo nth. Thus, we
will need additional sums of appro ximately $391,000 through December 2009. As of June 30, 2009 we have cash on hand in the sum of
$155,000.

We anticipate receiv ing investments until December 2009 under firm co mmit ments at the sum of appro ximately $258,000 (out of w hich we
have already received $114,000 in June 2009). In addition Earthbo und LLC ("EB") has received an amended and restated warrant to invest in
the Co mpany the sum of $200,000 until August 31, 2009. If this warrant will be exercised we shall receive a total of $458,000 before
December 2009. If the warrant granted to EB will not be exercised, we will need to raise at least $133,000 fro m other investors during the
fourth quarter of 2009. This is without taking into account approved unused credit lines in the sum of appro ximately $27,937.

The Co mpany has sustained operating los ses and its cash needs extend beyond its current resources. Subsequent to December 2009, the
Co mpany will exhaust most of its liquidity. In addition, the Co mpany does not have a reliable consistent source of future fun ding. These factors
create an uncertainty about the Company’s ability to continue as a going concern.

The Co mpany anticipates that it will begin to realize material revenues in the potato season of 2010 (the third and fourth qu arters of 2010), as
clients will begin to utilize and pay for the Company’s product and technology, and the Company determined that approximately $2.5 million
of additional funding is necessary to bridge the Co mpany to the larger revenue sales that were due to begin in 2010. Realization of revenues
is subject to regulatory approval of the relevant regulator, in each country where we intend to deliver, distribute and sell our pro ducts, which we
currently do not have, except for the state of Israel.

Net Cash Provided by or Used in Operating Activities      for the years 2008, 2007 and 2006

Net cash used in operating activities, generated from continuing operations was $589,632, $226,617 and $868,175 for the years ended
December 31, 2008, 2007 and 2006, respectively. Net cash used in operating activities pri marily reflects the net loss for those periods, which
was reduced in part by depreciation and amort ization, stock-based compensation and changes in operating assets and liabilit ies.

Net cash (used in) p rovided in operating activit ies, generated fro m disco ntinued operations (in 2007 includes capital gain on disposal of
$245,574), was ($153,592) and $246,234 for the years ended December 31, 2007 and 2006.

Net Cash Provided by or Used in Operating Activities      for the three months ended March 31, 2009 and March 31, 2008

Net cash used in operating activities, generated from continuing operations was $96,632 and $92,503 for the three month perio d ended March
31, 2009 and 2008, respectively. Net cash used in operating activities primarily reflects the net loss for those periods $219,428 and $90,451
respectively, which was reduced in part by none cash stock-based compensation $25,546 and $0, respectively and changes in operating assets
and liabilities $97,250 and $2,052, respectively.

Net Cash Provided by or Used in Investing Activities      for the years 2008, 2007 and 2006

Net cash used in investing activities was $18,682, $4,267 and $27,685 for the years ended December 31, 2008, 2007 and 2006, respectively,
used primarily to purchase equipment (such as computers, and office equip ment), and funds deposit in respect of emp loyees rig hts upon
retirement.

Net Cash Provided by or Used in Investing Activities      for the three mo nths periods ended March 31, 2009 and March 31, 2008

Net cash used in investing activities was $8,314, and $4,764 for the three month period ended March 31, 2009, and 2008, respectively, and was
used primarily to purchase equipment (such as computers, and o ffice equip ment), and fund deposits in respect of emp loyees rights upon
retirement.


Net Cash Provided by or Used in Financing Activities       for the years 2008, 2007 and 2006

Net cash provided by financing activities was $845,744, $324,661 and $677,626 for the years ended December 31, 2008, 2007 and 2006,
respectively, primarily attributable to capital raised in 2008, 2007 and 2006 and to loans from shareholders that were receiv ed in 2006.
Net Cash Provided by or Used in Financing Activities        for the three months periods ended March 31, 2009 and March 31, 2008

Net cash provided by financing activ ities was $132,126, and $98,490 fo r the three month period ended March 31, 2009 and 2008, respectively,
which is primarily attributable to capital raised at the amounts of $245,000 and 98,490 respectively, reduced by deferred issuance expenses at
the amount of 112,874 and $0, respectively.

Management believes that as a result of anticipated financing in 2009, and with certain revenues to be received fro m the sale and delivery of its
products to clients, there will be sufficient capital to meet operating needs for the year ended December 31, 2009. Ho wever, there can be no
assurance that we will be able to obtain such financing, on terms acceptable to us and at the times required, or at all. In addition , there can be no
assurance that the contracts that the Company is relying upon will generate sufficient revenue to meet its operating needs, a nd therefore, there
is a risk that the Co mpany will not have sufficient capital or liquidity in the future, if these contracts do not come to fru ition, or do not generate
the revenue the Company anticipates. If these contracts do not generate the anticipated revenue, it is likely the Co mpany will not have
sufficient liquid ity or cap ital resources to sustain itself without additional financing, and there is no assurance that additional financings will be
available to the Co mpany, or if such financing will be available on acceptable terms.



                                                                          13
Off-Bal ance Sheet Arrangements

We do not have any off balance sheet arrangements that are reas onably likely to have a current or future effect on our financial condition,
revenues, results of operations, liquid ity or capital expenditures.

Critical Accounti ng Policies

The Securities and Exchange Co mmission ("SEC") defines "critical accounting policies" as those that require application of management's
most difficult, subjective or co mplex judg ments, often as a result of the need to make estimates about the effect of matters that are inherently
uncertain and may change in subsequent periods. Our accounting policies are described in Note 2 to the financial statements appearing
elsewhere in th is report. Not all of the accounting policies require management to make d ifficult, subjective or co mplex judg ments or estimates.
Due to the early stage of operations of the Company there are no accounting policies that are considered to be critical accounting policies by
the management.

Recentl y issued accounting pronouncements

FAS 141(R), "Business Combinati ons "

In December 2007, the FASB issued FAS 141(R), “Business Combinations”. This Statement will replace FAS 141, “Business Co mbinations”
(“FAS 141(R)”). FAS 141(R) retains the fundamental requirements of FAS 141 with respect to the implementation of the acquisition method of
accounting (“the purchase method”) for all business combinations and for the identificat ion of the acquirer for each business comb ination. This
Statement also establishes principles and requirements for how the acquirer recognizes and measures in its financial statemen ts the identifiable
assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree, how the acquirer recognizes and me asures the goodwill
acquired in a business combination and the disclosure requirements to enable users of the financial statements to evaluate the nature and
financial effects of the business combination.

FAS 141(R) will apply prospectively to business combinations for wh ich the acquisition date is on or after December 15, 2008 (January 1,
2009 fo r the Co mpany). Early adoption of FAS 141(R) is prohibited. The Co mpany has not yet evaluated this statement for the impact, if any,
that it will have on the financial position and results of operations on the Co mpany.

FAS 160, "Noncontrolling Interests in Consoli dated Financial Statements "

In December 2007, the FASB issued FAS 160, “Non-controlling Interests in Consolidated Financial Statements ” (“FAS 160”). Th is Statement
amends ARB 51 and establishes accounting and reporting standards for the non -controlling (minority) interest in a subsidiary and for the
deconsolidation of a subsidiary. FAS 160 clarifies that a non -controlling interest in a subsidiary is an ownership interest in the consolidated
entity that should be reported as equity in the consolidated financial statements. FAS 160 is effective for fiscal years beginning on or after
December 15, 2008 (January 1, 2009 for the Co mpany). Early adoption of FAS 160 is prohib ited. The Co mpany has not yet determi ned the
impact, if any, that FAS 160 will have on its financial position and res ults of operations.

FAS No. 162, "The Hierarchy of Generally Accepted Accounti ng Princi ples"

In May 2008, the FA SB issued FAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles" ("FAS 162"). FAS 162 id entifies
the sources of accounting principles and the framewo rk for selecting the principles to be used in the preparation of financial statements of
nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States (the GAAP
hierarchy). FAS 162 is effective sixty days following the SEC's approval of PCAOB amend ments to AU Section 411, "The Meaning of 'Pre sent
Fairly in Conformity With Generally Accepted Accounting Principles'". The Co mpany is currently adhere to the hierarchy of GAA P as
presented in FAS 162, and the adoption is not expected to have a material impact on the financial position and results of operations on the
Co mpany.

FAS No. 165, “Subsequent Events”

In May 2009, the FASB issued FAS No. 165, “ Subsequent Events ”. This statement establishes general standards of accounting and disclosure
of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. FAS No. 165 is effective
for interim or annual financial periods ending after June 15, 2009. The Co mpany does not expect the adoption of FAS No. 165 will have any
material impact on its consolidated results of operations, financial positions and cash flows.

                                                                        14
                                                                     B USINESS

History

Pimi Agro CleanTech, Ltd. ("Pimi Israel") was establis hed in 2004 with a vision to develop and sell environ mentally friendly alternative
solutions to current methods for pre and post harvest treatments of fruits and vegetables. Current methods in practice and pr oducts leave residue
of harmful chemical pesticides. Pimi and its Co-Founder, M r. Nimrod Ben Yehuda have invested many years of research in developing
eco-friendly solutions; the company’s technology platform is based on a unique and patented formulation of STHP for the treatment of fruits
and vegetables. Pimi has also developed a controlled distribution system to apply its solution while maintain ing high levels of relative h u mid ity
in storage rooms using advanced technology to create micro droplets, in accordance with special working protocol.

In December 2005, Pimi Israel purchased all of the outstanding shares of Optiguide. Optiguide was an Israeli co mpany that engaged in the
development, assembly and marketing of hu midity control systems. At the time, the Co mpany ’s strategy was to develop and integrate a product
based on Optiguide’s fogging delivery systems and the Company’s formula. On April 30, 2007 Pimi Israel co mp leted the sale of Optiguide.
For further information, p lease see Note 14 to our Financial Statements.

On April 27, 2009 we purchased all the issued shares of Pimi Israel fro m Pimi Israel’s shareholders, in consideration for 6,313,589 shares of
the Company’s Co mmon Stock. As a result, Pimi Israel became a wholly owned subsidiary of the Company. As described further in Item 26,
under the pre-ruling attained in accordance with the Israeli Tax Ord inance, the Company is barred fro m selling the shares of Pimi Israel fo r a
period of 24 months from the date of acquisition.

At the mo ment Pimi is focused on addressing the immediate need for treat me nt of season-long harvest storage, which is chemical-free (after
wash) and environmentally friendly for table and processed potatoes and also for potatoes seeds.

Industry Overview

The fresh fruit and vegetable industry is constantly seeking technology and methods to prolong shelf life, reduce quality losses and keep
freshness of crops. In most cases the only way to prolong shelf life and reduce quality losses is by using chemicals which le ave residues. The
processed food industry is also using chemicals which leave residues and contaminate water and livestock. Heavy chemicals which leave
residue are used also by the seed industry.

Agricultural regulatory bodies such as European Commission of Health and Consumer Protection the “European Co mmission" or the " EC")
and the US Env iron ment Protection Agency (the "EPA"), are increasingly focusing to reduce the use of residue chemicals in tre ating fruits,
vegetables, seeds and soil in favor of environ ment-friendly alternatives.

In addition, organic food and organic agriculture is rapid ly gaining mo mentu m and is advocating chemical and residue -free u se from gro wth,
harvest to storage and maintenance. This is strengthened by the relat ively new t rend to consume low or non -residue produce, which have risen
to 20%-25% of consumed produce in developed countries like Netherlands (see "Reducing Residue Rising up Priority List" 78 FGJ 1 Febr uary
2008. at : http://www.bcpcertis.co m/ Certis.bcp/English/Home/News/page.aspx/565?xf_ itemId=522&xf_selectionDatapartId=512 .
The Co mpany’s management believes that the trend in the market (as may be exh ibited by market leaders such as Marks & Sp encer, Tesco and
Sainsbury in the UK and EDEKA chain in Germany) is to replace, as much as possible, fruits and v egetables treated with chemical wh ich leave
residues with fruits and vegetables with no residue or low residue.

Losses of agricultural produce, as high as 40% in countries such as India (see: http://www.postharvestindia.com ) and China (see Post harvest
Handling of Fresh Vegetables edited by Tina O'Hare, published 2001 at ACIAR, and see Kader at Acta Hort icular. 682, ISHS2005), due to
diseases and lack o f correct supply chain fro m the field to the stores, are exacerbated by the increasing demand for food p roduce, especially in
developing countries.

Accordingly, there is a significant need to find alternative solutions to current chemical t reat ments for pre - and post- harvest treatments of fru its
and vegetables that will provide the following benefits:


  Reduce spoilage and losses of produce;

  Extend shelf-life and improve quality of fruits, vegetables and grains;
 non-residue and leave no harmfu l chemical by-products;
  Are
 cost effective;
  Are

  Approved for organically produced crops.

With roughly 800 million tons of stored fruits and vegetables annually (see USDA VGS -328/August 27, 2008) world-wide, management
believes there is an immediate, addressable market for Pimi’s products.
The Potatoes Industry - the Need to Replace CIPC and prolong shelf life

Pimi is attempting to address the immediate need for developing treat ment and season -long harvest storage that is chemical-free and
environmentally friendly. As of the date of the filing of this registration statement, Pimi is focusing on the treatment of potatoes, which is the
second largest stored crop worldwide (after grains), and Pimi’s first sales target. The potato market for Pimi’s product is divided into two major
sections: stored potatoes and seeds potatoes.

                                                                       15
Potatoes are the fourth largest crop in the world. The annual crop of potatoes is estimated to be around 320 million tons (se e also " The
Market"). In developed countries roughly half of the crop is used for direct use by households (i.e. table potatoes) and the rest for processing,
such as chips/crisps and French fries (i.e. processed potatoes). In non -developed countries, 80% of the crop is used as table potatoes and the
rest as processed potatoes. Therefore we estimate that the annual crop of potatoes is divided almost equally between table an d processed
potatoes.

Stored potatoes begin sprouting, in most circumstances, after three mo nths in storage. Effective sprout control is a majo r component of
managing stored potato quality. If p roper sprout control is not maintained, significant reduction to tuber quality will occur , and the ability to
store for extended periods of time is dimin ished. Sprouting causes high yield loss and low quality produce for consumers and for processing.
Sprouting is also associated with the conversion of starch to sugars, which is undesirable in the processing industry, due to the darkening effect
of fried products. In the table potatoes industry, visible sprouts on potatoes are unacceptable to consumers.

The primary method to control sprouting in storage is with post harvest application of isopropyl N-(3-ch lorphenyl) carbamate ("Chlorpropham"
or     "CICP")    a      synthetic    hormone       that    is   used     worldwide.      For    the    toxic   effects    of    CIPC     see:
http://pmep.cce.cornell.edu/profiles/exto xnet/carbaryl-dicrotophos/chlorpropham-ext.ht ml .

CICP is a high stable chemical co mpound therefore it has high residue where ever it is app lied. Today CIPC is applied in storage rooms as well
as in packing houses before distribution to retailers, therefore its residues can be found on the wall and floors of storage houses, on the
processing lines, in water used for washing the potatoes and also in livestock which are fed with the potatoes peel.

Therefore regulators such as the European Commission ("The EC") and United States EPA are pushing for substantial reduction o f permitted
maximu m residues level of CIPC in crops, livestock and water. Th e EU has issued in 2008, a Directive (196/2008 of January 29, 2008) which
sets the Maximu m Residue Level ("MRL") of CIPC to 10mg per kg. The UK has recently regulated that potatoes treated with more than 36g of
CIPC per ton should only be used for commercial processing. The British Potato Council together with the industry in the UK, have set a
maximu m o f 63.75mg per ton for co mmercial processing.

In the US, in August 1996, a federal registration elig ibility decision (RED) fo r CIPC was issued by the EPA for the continued use of this
chemical as sprout inhibitor of harvested potatoes in storage. A mandate regulated in 2002 by the Environ mental Protec tion Agency, resulted in
a reduction in allo wable CIPC tolerance of residue, on fresh potatoes fro m 50pp m to 30pp m per kg. Residues as high as 40 ppm are permitted
by EPA on wet peel potatoes, which goes to life feed stock. Similar consequences of CIPC rea ssessment are co mmon in potato-growing region
in the world such as Canada and Australia. In Sweden CIPC has been banned for use since 2005. (Fo r additional informat ion see "The Need:
Dimin ishing Use of CIPC and Extending Shelve Life").

It is co mmon that diseases develop in stored potatoes. The current procedure to deal with this situation is to lower the humidity and dry the
potatoes which, in turn, results in huge yield losses. Dehydration is also important co mponent as potatoes are losing part of their weight during
storage due to dehydration.

Pimi has developed patented formulas ("Products"), applicat ion methods and storage protocols which are environ mental friendly and which
leave no residue after washing. Pimi’s Products are aimed at substituting CIPC as a sprout inhibitor, increasing shelf life, and preventing
quality reduction. The Products and their applications prevent dehydration and quantity losses.

Our Products and Technology

At the date of this reg istration statement, Pimi develops, tests and markets Spudefender TM for t reatment o f stored table and pro cessed potatoes,
StoreGuard TM for treat ment in storage of other vegetables, and SeedGuard TM fo r treat ment of seed potatoes:

The SpuDefender TM

Pimi develops and markets the SpuDefender TM product. SpuDefender TM is a formu lated STHP designed for use in potato storage treatment to
inhibit sprouting and rotting and reduce decay, quality and quantity losses. The SpuDefender TM is patent protected. The SpuDefender TM is
applied to the stored potatoes inside storehouses, using Pimi’s proprietary storage application protocol which is based on an especially designed
system and ultrasonic atomizers to provide optimu m results (the "Technology"). SpuDefender TM is able to supplement five benefits in one
solution which consequently extend storability and shelf life of crops, reduces quantity and quality losses thus, increase yield and revenues for
growers and producers.

Mr. Nimrod Ben Yehuda, our founder and Ch ief Technology Officer, has initiated or otherwise been involved with several research projects for
SpuDefender since 1998, as described below:

 1998, Mr. Ben Yehuda init iated a research project which was independently conducted by Uzi Afek, Janeta Orenstein, E. Nuriel fro m
  In
  the Vo lcani Center, Depart ment of postharvest Science of fresh Produce, Gilat Experiment Station, M inistry Of Agriculture, AR O, Negev,
     Israel see Uzi Afek, Janeta Orenstein, E. Nuriel " Using HPP (Hydrogen Pero xide Plus) to Inhibit Potato Sprouting During Sto rage" see at
     http://www.pimiag ro.co m/upload_pdf/1241461757_ 2.pdf.

  2003, Mr. Ben Yehuda init iated a research project which was conducted by A. Briddon, M.Sc., by the Sutton Bridge Experimen tal unit,
   In
   Spalding, Lincolnshire. The study was published under the title: "Sprout control of potatoes using MCW -100 1 under 'suction wall' storage
   conditions".

  2003, David Ross, Matthew Smallwood, Brian pool, and Bob Graham published a research study under the title "Evaluate effic acy of
   In
   MCW-100 2 , as one having an in store potato sprout suppression activity" the research was conducted independently by the Scottish
   Agriculture College SA C.

  2008, the Co mpany in itiated a research study which was conduct ed by Prof. Abraham Nach mias (the company’s Ch ief Research
   In
   Officer) under the tit le "SpuDefender - Sp rout Suppressant for Osem - Nestle, Israel". The research was executed by The Center for Potato
   Research in Hot Climates Ltd.

  2009, the Co mpany init iated a research study under the title "SpuDefender - Novel Environ mental Friendly Potato Sprout Suppressant,
   In
   -Europe 2009" wh ich was executed by Redebel Affairs Expert, Belgiu m.

It has been proven through numerous tests, pilots in storage rooms, and years of experience of semi co mmercial use that the SpuDefender
formulat ion and the storage protocols have the following benefits:

 
   Anti-sprouting;
 
   Disease control;
 
   Prevents dehydration and shrinkage.
 
   Enhances fry color for processed potatoes (crisps and French fries)
 
   Enhances storage conditions by reducing the major stress factors such as suffocation, dehydration and microbial attack.




1
    M CW_-100 is the former name of SpuDefender

2
    M CW_-100 is the former name of SpuDefender


                                                                      16
SpuDefender TM is an external treat ment, and therefore, after washing it leaves no residue. At the end of the application process the active
ingredient of SpuDefender TM deco mposes into water and o xygen, unlike existing chemical alternatives, such as CIPC.

SpuDefender TM has been tested for several years in Israel on a variety of potatoes, which are gro wn in hot climate regions, and was found
effective. In addition, Spudefender has been and continues to be used by PepsiCo Israel, the producer of Frit-o-lays crisps in Israel and by
Tapud Ltd., who supplies French Fries to McDonald's in Israel. Such usage has been based on a non -binding verbal agreement between Pimi
and these companies. During the last potato season (September 2008 to April 2009) Pimi has conducted pilot storage rooms with SpuDefender
TM
   in the UK (by Omex for PepsiCo and McCain), Germany (Weuthen) and the Ukraine (by Gaben for Kraft Foods) in co ld weather condition s
with no-mechanical cooling rooms and has made some adjustments to its technology to these type of storage conditions . Pimi has also
successfully treated table-potato storage rooms with SupDefender (by Omex for Branston) during the last potatoes season in the UK (See
"Recent Developments"). These tests were planed and supervised by the agronomist teams of all the above mentioned par ties.

StoreGuard TM

StoreGuard TM is designed to extend the shelf life of fruits and vegetables by preventing a majority o f crop skin d iseases, and improv ing s torage
conditions. StoreGuard TM enriches the crop with Oxygen and humidity, wh ich are key factors for good storability pro cess. The active
ingredient of StoreGuard is STHP, wh ich is known to o xid ize bacteria and fungi, as well as to be effective on a wide range of microorganis ms.
Accordingly, StoreGuard is found to be effective in extending shelf live of fru its and vegetables at farmer storage rooms, and on supermarket
shelves and later on in consumer's homes.

During the 2006-2007 cabbage season, StoreGuard was tested by Omex Agricu lture ltd, UK in warehouses related to retail chain stores and
was found effective in preventing quantity and quality losses related to dehydration, bacteria and fungal diseases in comparis on to cabbage
which was stored in regular storage conditions (the tests were initiated by Pimi and were executed by Omex Agriculture Ltd., UK. The final
report was published in August 2007 by Andrew Richardson, and Alliu m & Brassica Agronomy Ltd. who were the project leaders). To date,
use of StoreGuard has been found effective in comparison trials of stored cabbage and is currently being sold to a farmer in the UK who
supplies cabbage to Marks & Spencer, a leading UK retailer. At the vegetable storage season of 2008-2009 thousands of tons of cabbage,
broccoli and cauliflower were stored with StoreGuard, gaining increased yield and reducing diseases. Pimi p lans to execute tests of StoreGuard
on onions and carrots during the 2009 season (fro m September 2009 -2010).

As of the date of the filing o f this registration statement, StoreGuard is pro moted and sold in the UK by our distributor Omex Agriculture ltd.,
(see "Customers and Partners") and is used by several lead ing farmhouses in the UK.

SeedGuard TM

Potatoes are susceptible to a variety of d iseases that lower yields and tuber quality which might cause significant losses in the quantities and
quality of crops. What's more, pathogens accumulate in successive cloning of tubers and in the soil used to grow them. That is why sustainable
potato production depends on a constantly renewed supply of disease-free planting material. According to numerous international regulations,
seeds, of all types, must be disinfected to p revent the transfer of d iseases between countries, between seeds, fro m seeds to soil, and fro m seeds
to crop.

Seed tuber disinfect ion treat ments are used to reduce seed borne diseases. However organic mercury wh ich has been used for this purpose has
been banned and the alternative agents available are effective against only some of the pathogens. Moreover an increasing number of pathogens
are found to be unaffected by any of these treatments (see Lea Tsror and al. "Survey of Bacterial and Fungal Seed borne diseases in Imported
and Domestic Seed Tubers" (1999) at http://www.pimiag ro.co m/upload_pdf/1241461817_ 4.pdf).

Pimi has embarked on a R&D plan for potato-seed applications, aimed for the development of an innovative, holistic and ecolo gical solution to
treat potato seeds throughout their lifecycle, wh ich was approved for receiving grants from the Israeli Ch ief Scie n tist Office (see
"Govern mental Support ") . Seed Guard TM is designed to provide added-value to the seed producer and potato growers owing t o its long lasting
disinfectant effect, versus existing aggressive chemical treat ments which are not environ mental f riendly solutions.

Since 2005 we have conducted extensive laboratory and field trials with Seed Guard in order to test its effectiveness against pathogens. We
have conducted laboratory screening tests with Seed Guard TM of most common seed pathogens (bacteria, fungi, mo lds, yeast) diseases under the
supervision of the Vulcani institute Israel. The results have shown that SeedGuard is highly effective in controlling diseases caused by the
major pathogens. We have also conducted "in situ" tests on seed potato es, in order the test SeedGuard’s efficacy on these seeds. We have
conducted several field trials on different seed varieties, different soil p rofiles and different climates. The conclusions f ro m all of these trials
were that Seed Guard is able to control s eedborne diseases and does not have negative effect on the yield.

The Co mpany has initiated research by independent research institutes, as well by Pimi’s Chief Research Officer, Prof. Abraham Nach mias,
which examined Seed Guard, as described below:
 2006, Pimi init iated a research study which was conducted by Dr. Leah Tsror, Orly Erlich, Mariana Hazanovsky – Uri Zig, Vitali
  In
  Tropnov which was published under the title "Field Experiment Report - Evaluation of Seed Gourd (SG) 101 as seed treatment for
  reduction of Co mmon Scab on Potato" ,The research was executed by the, Vo lcani Center, Depart ment of Plant Pathology, Gilat
  Experiment Station, M inistry Of Agriculture, ARO Negev, Israel at see http://www.p imiagro.co m/upload_pdf/1245745035_123.pdf .

 2008, Pimi initiated a research study which was conducted by Prof. Abraham Nach mias under the title, "Seed Gourd SG 101 Po tato
  In
  Seed disinfection for EGO" . The research was executed by The Center for Potato Research in Hot Climates Ltd.



An advantage of Seed Guard, which was d iscovered in connection with the tests described above, that Seed Guard does not harm th e potato
seeds, which, immed iately after harvest, have a very delicate peel. Management is not aware of any product or technology which is able to treat
potato seed at this crucial stage of the seeds. In addition, Seed Guard has been found to protect the seeds against seedborne, storage and soil
borne diseases during the entire lifecycle of the potato seeds, fro m harvest to storage and planting, Management believes, based on the tests
described above, that SeedGuard is suited for this early stage of the life cycle of seeds, and believes this unique advantage will help in the
promotion and sales of Seed Guard.

Pimi has discovered what is called the "Epical Do minance Breakdown Effect" (patent protected) which stimulates lateral eyes t hat may
cause more stems and thus support more potato tubers that may result in a higher yield fo r the grower. These qualities were demonstrated in
field trials with some potato seed varieties, and it suits the seed preparation method before planting, which is used in Euro pean countries.

Management intends that SeedGuard will provide the following key benefits, which were demonstrate d in trials conducted so far:

        Sanitizes a wide range of seed-born pathogens;
        Induces apical do minance breakdown in potato seeds;
        Where epical do minance breakdown can be done, may increase marketable y ield and therefore may increase grower ’s profits in
         potato seeds;
        Delivers an extra care program for seeds from harvest through storage to planting by controlling the majority of diseases thr eatening
         the seeds and its daughters;
        Increase seed health and potency.

Management estimates that additional substantial R&D is required to tailor the Seed Guard to specific seeds such as wheat, cor n and others.

                                                                      17
Products planned for Research and development

Pimi plans to extend its line of products in the coming years by devoting substantial R&D for two other areas, where Pimi has identified a
market need for environ mental friendly solutions.

GrainGuard TM

The grain agricultural market, including corn, wheat, rice and soy, make up the largest segment of the dry foods storage market. Grains are
typically stored in silos and tend to develop mildew, fungus, bacteria and other harmful organis ms which cause huge losses. Current grain
disinfectant solutions are mainly chemicals and are harmfu l to the environment and leave residue in the grains. These chemicals are gradually
being           phased         out        (see        Food         Industry        Grocer,        January          17,       2009,         at:
http://findarticles.com/p/articles/mi_hb5245/ is_7888_ 232/ai_n31348288/?tag=content;col1            ,           and                      also
at: http://www.pan-u k.org/pestnews/Issue/pn57/pn57p20a.ht m ).

GrainGuard TM is designed to treat grains against mildew, fungus, bacteria and other harmful organis ms, which cause huge losses in yield.
Unlike existing chemical treat ments, Grain Guard’s active ingredient is environ ment-friendly and residue-free.

This product line requires substantial R&D and field tests in order to tailor specific solution variants to specific types of grains and pests and
storage infrastructure.

SoilGuard TM

The soil treatment market is in need for an ecological solution since the commonly used agrochemical Methyl Bro mide was banne d from use
due to its harmful effects on the environment and is gradually phasing out. We aim that SoilGuard TM will address the following:



  Disinfect ion against soil diseases;

  Treat ments against pests (such as Nematodes);

  Killing of weeds.

We have yet to initiate the R&D for the So ilGuard    TM
                                                           which may be lengthy and costly, and which might require cooperation with a strategic
partner in this field.

Our Technol ogy

Pimi’s technology for increasing the storability and shelf life of fru its and vegetables is based on a unique proprietary solutio n and delivery
system.

Active Ingredient -Stabilized Hydrogen Peroxide solution (STHP)

Pimi has developed a patented Stabilized Hydrogen Pero xide (H2O2) formu la that includes: Hydrogen Pero xide (widely used in va rious
industrial applications, such as: rocket fuel, wound disinfection, hair coloring and teeth whitening), Phosphoric acid and st abilizers. The
formulat ions were developed by Nimrod Ben Yehuda, Pimi’s co-founder, with the assistance of leading research institutes.

Fogging delivery system

By harnessing the advanced fogging technology of ultrasonic micro Droplets (wh ich was develop ed by third parties and was upgraded by
Pimi's management) and the special distribution method developed by the Co mpany, Pimi's Technology is capable of d istributing a lower than
10 micron droplet cloud in the storage room. This ultrasonic droplet diameter and the application method generate “Dry Fog”, forms a highly
effective vehicle for d istributing Pimi’s products. Ultrasonic droplets with Pimi’s distribution protocol enable the penetration of even the tiniest
gaps in a potato peel. An added benefit comes with the ability to raise relative humid ity to a very high level of 99% without causing the
devastating effects of a condensation event. The system is fully automated, thus enabling a cost -effective imp lementation for customers,
reducing many hours of labor and minimizing user intervention.

                                                                          18
Manufacturing Process Supply of Raw Material

Pimi’s products are currently produced by Solvay Chemical International S.A in their p lant located in Belg iu m ("Solvay") and also in Israel.
Solvay is one of the leading world-wide producers of Hydrogen Pero xide. Solvay manufactures STHP for us while the silver stabilizer of the
formula is produced by another manufacturer in Europe. Management anticipates that Solvay will produce our products for North A merica
and East Asia. Management believes that Solvay has production facilit ies in these regions.

Pimi has agreed to buy minimal quantities of the products from Solvay, upon the approval of our products by the EC. The prices of the
products are fixed for the long term and are subject to the fluctuations in the prices of raw materials, energy and the cost of packaging used for
the manufacturing of our products.

Trans portation and Storage of our Products

Unstable Hydrogen Pero xide is a common chemical sold and transported world wide in 50% concentrations; transported Hydrogen i n such
concentrations is defined as dangerous goods by the industry.

We have decided to supply our products with stable Hydrogen Peroxide and at low concentration of only 20%, wh ich is graded as lower risk
compared to the Unstable Hydrogen Peroxide at 50% concentration. At this grade of risk the product should be transporte d by certified truck
drivers, and the truck should be marked with special signs. The delivery o f the product should be transported together with M aterial Safety
Data Sheets (MSDS) which show the dangers related to the product and the safety procedures, inc luding how the product should be handled.

Pero xide is an aggressive oxidizer and will corrode many materials. Hydrogen Pero xide should be stored in a cool, dry, well -ventilated area and
away fro m any flammable or co mbustible substances. It should be trans ported in special tanks and vehicles and should be stored in a container
composed of non-reactive materials.

Pimi is carefu lly and diligently following the above rules and regulations in handling the product in transportation and stor age.

Governmental Support

Pimi Israel has received grants from the Israeli Ch ief Scientist for a program of investment in research and development of solution for
disinfection of potato seeds (SeedGuard TM ) in 6 stages method. The approval of the Chief Scientist was exten ded and changed in order to
enable certain expenses to be recognized for the grant. Pimi has received fro m the Chief Scientist the sum of $121,753 (484,4 29 NIS) as grant
under this program.

Pimi is obligated to pay the grant back to the Chief Scientist in the form of royalties. In the first 3 years of sales we shall pay 3% out of the
sales of the product which was developed under the R&D program. In the fourth, fifth and sixth years of sales we shall pay 4% of such sales,
and fro m the seventh year and on we shall pay 5% up to the amount of the grant. If there will be no sales of the product wh ich was developed
under the program, Pimi will not be required to pay back the grant.

Under the law and regulat ions relating to the g rant, sale of the IP developed un der the programe to a foreign entity will require the approval of
the Israeli Ch ief Scientist.

                                                                        19
Intellectual Property

We have developed a significant intellectual property portfolio of patents. We believe that our intellectual p roperty portfolio, coupled with our
strategic relationships (see "Customers and Partners " ) and accumu lated experience in the field, gives us an advantage over potential
competitors. We currently maintain the fo llo wing patents (for the agreement of the transfer of the rights in the patents and patents applications
to us, see "Certain Relat ions and Related Parties transaction" ) :

Country                                Patent Register No.             Application No.                  Status                 Vali dity Date
U.S.A                                       6,797,302                                                  Granted                   July 2019
U.S.A                                       6,946,155                                                  Granted                   July 2019
U.S.A                                       7,147,872                                                  Granted                   July 2019
Europe                                                                   99933105.1                    Pending
China                                       99810112.5                                                 Granted                   July 2019
Russia                                       2262230                                                   Granted                   July 2019
Russia                                                                   2005115093                    Pending
Australia                                    757,181                                                   Granted                   July 2019
South Africa                                2001/1528                                                  Granted                   July 2019
Israel                                                                       125520                    Pending
Chile                                                                        1675-99                   Pending
Mexico                                        230589                                                   Granted                   July 2019
Canada                                                                    2,338,718                    Pending
Kenya                                                                  PCT/ IL99/00403                 Pending
Argentina                                AR 019937- B1                                                 Granted                   July 2019
Bulgaria                                                                   105167                      Pending
Bolivia                                                                 P990103701                     Pending
Brazil                                                                  PI9912697-4                    Pending
Colo mb ia                                                                99047340                     Pending
Costa Rica                                                                   6061                      Pending
Cuba                                                                       22/ 2001                    Pending
Czech Republic                                                          PV 2001-254                    Pending
Georgia                                                                AP1999004257                    Pending
Guatemala                                                                PI99-01099                    Pending
Honduras                                                               PCT/ IL99/120                   Pending
Hungary                                                                   P0201109                     Pending
Korean                                                                 2001-7001082                    Pending
Latvia                                        12750                                                    Granted                   July 2019
Nicaragua                                     1441                                                     Granted                   July 2019
New Zealand                                  509566                                                    Granted                   July 2019
Peru                                          3093                                                     Granted                   July 2019
Poland                                      P-348722                                                   Granted                   July 2019
Paraguay                                      4217                                                     Granted                   July 2019
Slovenia                                  9920057-20615                                                Granted                   July 2019
Slovakia                                                                 PV97-2001                     Pending
Turkey                                     TR2001-231                                                  Granted                   July 2019
Uruguay                                                                    025.625                     Pending
Serbia                                                                     P-51/ 01                    Pending
Norway                                                                    20010447                     Pending
Ro mania                                                                A 2001-00090                   Pending



                                                                        20
Regulatory Approval of Pi mi's Products

In order to distribute and sell our products it should be approved by the regulators in every country where it is sold. So fa r we h ave obtained the
approval of the Israeli Plant Protection and Inspection Services for SpuDefender TM .

Our distributor for the UK, Omex Agriculture Ltd, is selling our product as "Plant Strengthener" under a clearance form the U K Pesticide
Safety Directorate, as a humid ifier and Oxidation enrich ing agent for Fru its and Vegetables.

We are currently acting together with Wilhelm Weuthen GmbH, our partner in Germany in order to obtain the approval of BWL (th e German
relevant authority) to the Spudefender. The BWL has agreed to extend our pilots rooms with Weuthen for next potatoes season to 7,000 tons.

As of the date of this registration statement we are simu ltaneously seeking the approvals of the U.S. and EU authorities fo r the sale of our
products in the U.S. and Eu rope, as described below :

Regulatory Process in the United States

The U.S. regulatory authority in charge of the approval of our product is the Environmental Protection Agency (EPA). The EPA regulates
pesticide chemical use in foods through a regulatory tolerance publication process. Under EPA regulat ions, specific pesticide chemicals may be
used in specific foods for particular reasons. The amount and kinds of pesticide chemical residues permitted to remain on foo d vary according
to FDA regulation which is ad min istered by the EPA. Alth ough the EPA establishes pesticide use and tolerances and exemptions from
tolerances for pesticide residues by its regulations, FDA enforces the EPA regulat ions through several provisions in the Food Drug and
Cosmetic Act.

In order to issue its approval for the use of such products, the EPA requires that we will show, through a series of physical and chemical tests
done by approved laboratories, that the registered product conforms with regulatory requirements and meets minimu m standards of safety to
humans and the environment when used as labeled. While the EPA does not require submission of efficacy data, EPA does hold co mpani es
responsible for insuring that the performance of a p roduct conforms to label claims.

At the date of this registration statement, we are engaging Wagner Regulatory Associates Inc. fro m Hockessin, Delaware ("Wagner") as our
regulatory consultant for our application to the EPA. Wagner filed our applicat ion dossier in June 2009, in order to have registration approval
for the coming potatoes season.

We have applied to the EPA to register SpudDefender containing Hydrogen Pero xide as the active ingredient. We have been advised by
Wagner that in June 2002, the EPA established a regulation that permits application of hydrogen peroxide to all food commodit ies, and
therefore when such product is used according to this EPA regulation, the residue of Hydrogen Peroxide is exempt fro m the req uirement for a
specific tolerance level (i.e. residue level). Therefore, in this instance, in Management ’s opinion, it is unlikely that the EPA would be concerned
about Hydrogen Pero xide since it is exempt fro m tolerance requirements. However, the EPA requires registration of any new label and/or
application of any new product, such as SpudDefender, and SpuDefender will be examined by the EPA for all its ingred ients, a process which
will take up to nine months.

We have been advised by Wagner that, due to the fact that there is an exempt ion fro m the requirement of tolerance for the active ingredient
(Hydrogen Pero xide), at the rate used in our products, the registration process will last between eight to twelve months and will cost us up to
$100,000.

If and when the EPA approval is received, Pimi will still be required to attain the approval in each state where our products will be
delivered. Management does not believe that the costs of registration in each state are of a material nature to the Co mpany.

We have been advised by our regulatory consultant that since the active ingredient of SpuDefender, StoreGuard and Seed Guard is the same (i.e.
Hydrogen Pero xide) there is an option to register StoreGuard and Seed Guard as an expansion of SpuDefender for other applicati ons and
uses. Therefore we believe the registration and approval of our other products will take between 4-6 months fro m submission of the respective
files.

Regulatory Process in Europe

In Europe the authority in charge of the approval of our product is the European Co mmission. Under the Plant Protection Products Directive
91/ 414 (the "EU Directive 91/414"), the European Co mmission requires that we will show that the product is not toxic, has phy sical and
chemical safety properties and is effect ive (i.e. it achieves the s tatement under its label). In o rder to submit the application ("Dossier") we have
engaged Redebel S.A fro m Brussels, Belg iu m (" Redebel"), who is a specialist in such process.
We have been advised by Redebel that in order to register our product in the European Community the complete Dossier for inclusion of
Hydrogen Pero xide on "Annex I" of EU Direct ive 91/ 414 must be approved by the European Co mmission ("Annex I Listing"). Such f ile has to
include documentation and in formation concerning the act ive ingred ient (in our case Hydrogen Pero xide). Important elements of such
documentation are toxico logical and eco-toxicological profile of the molecu le and eventual dangers and hazards coming from hu man
exposition. An example of use of this substance in “formulated “product has to be also presented, and the most important element of this part is
demonstration of the efficacy – prove of the activity of the product declared on the label. Solvay Chemicals International S.A (" Solvay") who is
one of the leading manufacturer o f Hydrogen Pero xide and the manufacturer of our Products for European circulation (see " Manufacturing
Process and Supply of Raw Materials " ), allo wed us to use part of its Biocide Products Directive Dossier under the EU Directive 91/ 414, in
order to save us trials and expenses relating to reaching the above information relating to Annex I Listing.

Concurrently, we have to apply for registration of the formu lation under (Annex II) and also to execute efficacy tests for th e product and its
application under what is called Annex III. In July 2009 we met with the British Health and Safety Executive (formerly known as the Pesticide
Safety Directorate PSD) and we have been advised that we will have to execute six efficacy trials and that due to a new regulation of the EU
fro m May 2009, the valuation period of the file by the reporting country will take up to 2 years (which formerly was only one year).

Normal procedure for efficacy testing is two years of trials. Redebel is currently preparing the file for submission, which will be submitted in
September 2009 to the UK as Rappaurter (Reporting) Member State who will examine the file on behalf o f the European Co mmissio n.

Due to the reason the Dossier of Solvay will support our application we estimate the co st of the registration to be up to 160,000 Euro.

Once the listing of the active ingredient (approval of the European Commission) will be received we shall have to register th e product in each
Member State of the EU, were our products will be sold and used , wh ich will cost additional fees between 8000 Euro- 42000 Euro (depending
on the Member State). We have been advised by Redebel that, in order to apply for the permanent member state (national) autho rization (as
well as for the provisional authorization) we will have to submit a co mplete Annex III dossier to each member state, where we will be
market ing and selling our product, for its approval. Each member state will evaluate the file and there could be differences in time and the
lengths of the process between the member states. However, we have been advised by Redebel that there is a possibilit y for a “Mutual
Recognition” procedure, under which the dossier is evaluated only once by one member state, and once authorization is received in this state,
the other member states will fo llow. This will decrease the costs of handling the process, and shorten the period of receiving t he authorizations
fro m d ifferent member states.

We have been advised by our regulatory consultant that once the active ingredient wi ll be approved by the European Co mmission (Annex I and
Annex II) than in order to register our other products (StoreGuard and Seed Guard) which are based on the same active ingredie nt, in the EU,
we will be required to conduct only efficacy trials (Annex II I) for these products. The process of registration of our other p roducts is expected
to take at least one year fro m the date of filing.

Effects of Regulatory Approvals on our Business pl ans

To date, we have filed the application with the EPA. If the authorization for SpuDefender is not received in a t imely manner, th an we will apply
SpuDefender in three p ilot rooms of 100 tons each in a university or a research centre in the U.S. These pilot roo ms imitate a section of typical
storage room wh ich is used across the U.S. for storage of potatoes. If authorization will be timely, it will not significantly change our timetable
as the efficacy pilot roo ms are requested by the customers and must be co mpleted. These tests are designed according to the standards and
protocols of Frit-o-lays, Potandon and McCain and will be closely monitored by their agronomists teams. Although we do not have
commercial agreement with these companies we assume that successful storage results in these pilot rooms will enable us to step into full
commercial usage during the 2010 potatoes season.

To date, we are p reparing together with Redebel the dossier fo r filing with the European Co mmission. We plan to submit t he do ssier to the
European Co mmission by the end of this calendar year. We have already received the approval of the German BW L to conduct tria ls in
commercial volu mes in Germany in the coming seasons. We intend to apply for permission from the PSD in the United K ingdom for six trial
rooms in the coming season, as part of the regulation process in the EU. We plan to receive temporary approvals in Germany, t he United
Kingdom, and perhaps other EU member states during the upcoming potato season (2010-2011).Accordingly, we anticipate that we will be able
to start commercial sales of SpuDefender in these countries by this time period. Concurrently we intend to continue the sales of Storo mex as
plant strengthener in the Un ited Kingdom fo r potatoes and cabbage.

                                                                        21
Customers and Partners

As a small co mpany with roots in Israel, one method by wh ich Pimi is ab le to contract with potential partners, in particu lar those having a
favorable foot-print in their respective markets and having the ability to educate end -users (i.e. their customers), is by gaining recognition and
acceptance of market leaders having the best leverage point to our prospective customers. These companies, being opinion lead ers with high
sensitivity to environ mental-friendly growing demands, are in the best position to influence their suppliers, who are Pimi's potential customers,
in testing and ultimately adopting Pimi's technology as their next generation solution for post -harvest treatment.

As discussed below, we have entered into agreements with co mpanies who specialize in the supply of agriculture products, primarily in
Europe. We are also cooperating with several major suppliers of table potatoes and producers of processed potatoes, who are examining Pimi’s
products in order to use it at their storage rooms during the next potato season.

Omex Agriculture Ltd.

In January 2009, Pimi Israel and Omex Agriculture Ltd. ("Omex " ), a co mpany who is active in supplying agriculture inputs to farmers in the
UK, entered into an Exclusive Distribution Agreement for a term of 5 years, and shall continue thereafter for consecutive one year terms, until
terminated by either party. Pimi and Omex have been working together in market ing Pimi's products for farmers in the UK since 2006. Under
this agreement, Omex markets, sells, d istributes and installs systems and equipment required for the applicat ion of Pimi's lo w dosage usage
protocol of SpuDefender TM in the UK. This version of SpuDefender TM will be distributed in the UK under the name of "Storomex" . A ll cost of
market ing of the Storomex will be borne by Omex. Under the agreement, should Storomex require registration with any government agency in
the UK, Omex will execute such registration and bear all associated costs. Pimi will provide Omex with all relevant technical informat ion
concerning Storomex, and Omex will provide Pimi with information concerning the development of the market, sales projections, report on
product performance and details of customers and storage facilit ies. It was agreed that the patent application and all other intellectual property
rights are, and upon termination of the agreement, remain Pimi's property. In c ase Omex shall not make appropriate sales, or efforts to achieve
sales as determined in the Agreement, Pimi will have the right to change the distribution terms to semi - exclusive. In case Omex shall not
achieve min imu m target of sales as determined in the Agreement, then Pimi may terminate the agreement.

Together with Omex we have conducted, in the potato season of 2008-2009, efficacy perfo rmance in pilot storage rooms, for major table potato
suppliers, and storage rooms of process potatoes for international key player in the industry (see "Recent Developments").

Omex is also engaged in the distribution of Pimi's StoreGuard     TM
                                                                       , for storage of cabbage in the UK, and it supplies this product to several
framers.

PepsiCo UK and Ireland (Frito- Lay)

During the last potato season we cooperated with PepsiCo Europe, and its UK headquarters which is in charge of potato storage in Wes t and
East Europe. PepsiCo p roduces and markets Frito Lay chips. We have installed a pilot storage room for a farmer who grows and stores potatoes
for Walker Snacks, a subsidiary of PepsiCo, who manufactures Frito Lay chips for PepsiCo. For the results of this pilot see Recent
Develop ments. As of the filing date o f th is registration statement we have also started discussions with Pep siCo USA who have exp ressed
intention to establish a pilot storage room for processed potatoes in the coming potatoes season.

McCain Food Limited

McCain is one of the world leaders in terms of processors of frozen food and French fries, and is a world kn own brand for French fries (See:
http://www.mccain.co m/co mpany/Pages/default.aspx ). During the last potato season we installed a p ilot storage room for a farmer in the
UK who grows potatoes for McCain UK. For the results of this pilot see Recent Develop ments.

Branston Holding Ltd

Branston Holdings Ltd. (“Branston”) is a packager and supplier o f table potatoes for retailers in the UK. Branston ’s main cu stomer is Tesco
UK, who is a lead ing retailer in the UK. Branston stores over 250 thousands tons of potatoes each year between its facilit ies and the farmers
who are associated with Branston. Pimi's partner in the UK made contact with Branston in June 2008, this lead to seve ral sessions with their
suppliers. During the last potato season, we installed a pilot storage room for a farmer who gro ws potatoes for Branston. For the results of this
pilot see Recent Develop ments. Branston's technical team has monitored and supervised the whole tests. For the upcoming season (October
2009-May 2010) the test program will include 10,000 tons of table potatoes.

RWZ- Wilhelm Weuthen GmbH

Wilhelm Weuthen Gmb H ("Weuthen") is one of the largest services suppliers for the potato industry in Germany. Weuthen is a company in the
RWZ DE group of companies, who is a supplier of agricu lture inputs to more than 75,000 farmers in Germany. During the 2008 se ason we
treated two pilot storage rooms of 1500 tons each with our product and technology relat ed to Weuthen (for the results of the pilot roo ms see
"Recent Developments").

We are currently negotiating with Weuthen the possibility of no minating Weuthen as our exclusive distributor in Germany, Aust ria,
Switzerland and The Benelu x countries, and we plan together with Weuthen to treat additional storage rooms in the coming potato season in
Germany.

Kraft Foods Inc.

Kraft Foods Inc. is one of the major growers, manufacturers and suppliers of processed potatoes for Eastern Europe. We have b een informed by
Kraft Food (Ukraine) that since they are not dealing with impo rtation of chemicals they have appointed Gaben to be its supplier for our
products to Ukraine. In April 2008 we have entered into an import contract with Gaben LLC, for the importation and supply of SpuDefender to
the Ukraine where Kraft's plant and storage roo ms are located. This contract exp ired in Septemb er 2008, and is no longer in effect. During the
season of 2008 we successfully treated a pilot storage room of 1,000 tons with our products and technology (for the results o f this pilot roo m
see "Recent Developments"). Kraft Food has decided to extend the usage of SpuDefender TM fo r 6,000 tons in the coming potato season (Oct
2009- May 2010). Kraft has also decided to initiate a trial with our Seed Guard TM on potato seeds in the coming crop season (Oct 2009- May
2010).


                                                                       22
Vegiesafe LLC (Earthbound LLC Group)

In January 2009 Pimi Israel entered into a Jo int Venture Agreement ("JV Agreement") with Vegiesafe LLC (" Vegiesafe"), an affiliate of
Earthbound LLC ("EB"), a group of co mpanies engaged in consulting to mass-market retailers and majo r supermarket chains in North A merica
( http://www.earthboundllc.com/ ).EB has a proven track record in developing private label campaigns (apparel) for Wal -Mart and Target
brands .

The Joint Venture will market, sell and distribute Pimi's technology throughout the United States, on an exclusive basis, and throughout Canada
and Mexico, on a non-exclusive basis. Veg iesafe will market and handle the sales activ ities of the Joint Venture. Vegiesafe intends to seek
retailers and major distributors in the U.S., who will reco mmend its producers and suppliers to manufacture and supply CIPC-free potatoes, or
CIPC-free potato products. The exclusivity of the Joint Venture is subject to fulfillment of certain milestones o f annual sales as herein
described. We will have 70% of the rights in the Joint Venture and will no minate two of its directors; Veg iesafe will have 30 % of the rights,
and will no minate one director. We will grant a sub-license to the Joint Venture for the use of our patents and technology, relat ing to the
products and to any new product developed by us, for the term o f the JV.

We are obligated to continue to operate the Joint Venture so long as certain trigger events occur prior to December 31, 2009. The Trigger event
is defined as: an event, where any retailer and any fast food chain, or any major packaged, fro zen or snack food marketer, or any major or
national vegetable (or fru it) gro wers and major or national d istributors in the US exp resses an interest in launching CIPC free p otatoes or CIPC
free potato products at any Retailer or by any distributor, by requesting its supplier/s to use our technology for potatoes or potato products, in
order to produce or to supply CIPC free potatoes or CIPC free potato products for its consumption.

In May 2009 Pimi and Vegiesafe mutually agreed that a trigger event occurred, thereby obligating, the continuation of the Joi nt
Venture. Accordingly, Veg iesafe’s exclusivity is subject to the fo llo wing milestones: Entering a CIPC free branding program with t wo
retailers or d istributors prior to September 2010; the treat ment of 150,000 tons of potatoes in the season of 2011 (September 2011); the
treatment of 350,000 tons of potatoes in the season of 2012 (September 2012).

Vegiesafe will invest in the Joint Venture an aggregate amount of $250,000 which will be used to cover expenses reflected in a budget prepared
for the J.V and approved by Vegiesafe and Pimi. The Joint Venture will use the Vegiesafe TM as the trademark for fruits and vegetables which
will be treated by our products and are CIPC free. Any additional investment in the Jo int Venture in excess of the $250,000 s hall be contributed
by the parties according to their share in the Joint Venture upon mutual consent, taking into account the Joint Venture 's business and its needs.

In the past seven months, Vegiesafe along with Pimi’s executives, have contacted market leaders within the food processing and wh olesale
industry such as McDonalds, McCain, Pepsico/Frit-O-Lay and Target. Specifically, telephone conversations, meeting and emails have been
exchanged between Vegiesafe and its representatives with such companies ’ commercial and technical officers. Such co mmunicat ions have
initiated a process whereby these companies have, in certain cases, provided to their suppliers an active recommendatio n to t est Pimi's
technology in a co mmercial scale warehouse. For examp le: Potandon Produce LLC, Lamb Weston and vario us farming organizations. In
addition, these recommendations were followed with technical definit ions by the introducing party within such companies regar ding the testing
guidelines. Specifically, the market lead ing co mpanies played an act ive ro le in defin ing the species and quantities to be tested, temperature
conditions, period and length of tests, as well as other guidelines.

For further description as to the activities of the Joint Venture as of the date of the filing of this registration statement , please see "Recent
Develop ments". For further info rmation as to the investment agreement with EB, see "Options Grants during Last Fiscal Year".

APH Group

APH Group fro m Netherlands is a d istributor of mach inery wh ich offers a co mplete range of equip ment fo r potato, onion and carrot
production, and is positioned strongly in Russia and China. Together with APH we are exp loring the possibility to distribute our products in
Russia. We are currently conducting negotiations with APH Group in order to appoint them as our distributor for Russia.

Oninvent Techniek B.V

Omnivent Techniek BV., ("Omn ivent"), is a company who is acting as distributor and installer of systems for control of storag e room
atmosphere mainly in Europe. We entered, into a Memorandum of Unders tanding ("MOU") in May 2008. Under the MOU, subject to the
success of the efficacy trials (during the potato season of July 2008-June 2009), Omn ivent will be appointed as our contractor for humidity
treatment systems in the Netherlands and in any country agreed to by us and Omnivent. It was agreed that subject to mutual decision of the
parties, they may go ahead with the cooperation after the success of the efficacy trials, and the parties will negotiate the terms of the
cooperation.
Solvay Chemical International S.A

Solvay is a wo rld leader in production of Hydrogen Pero xide. So lvay produces our products as on OEM product (under our name). Through
discussions and correspondence, we have mutually agreed with Solvay that Solvay will exclusively produce our products world-wide at
competitive market prices. As of the date of this registration statement, we are in negotiations with Solvay on the terms of our agreement with
them, and are currently working with them based on non-binding verbal agreement.

Tapud Industries Ltd

Tapud Industries Ltd, Israel, has been applying Pimi's products and technologies as part of a benchmark test versus the CIPC storage protocol
in roo ms storing 750 tons of potatoes. The results reported so far by Tapud ’s food technologists are that Pimi’s protocol achieved higher quality
results in comparison to the potatoes treated by CIPC, in terms of yield and the same results of frying colors. We use Tapud storage rooms as
our beta site in Israel. During this potatoes season (starting in Israel in June 2009), we conducted two commercial storage rooms in order to
optimize our storage protocol for different varieties of potatoes .

Strauss Elite Ltd

Strauss Elite (“St rauss”), who is the partner of PepsiCo in Israel, has been using our products and technologies for four years. Last season we
applied SpuDefender on more than 50% of Strauss ’s stored potatoes. This year, we started applying SpuDefener on more that 70% of Strauss ’s
stored potatoes. It was agreed verbally between us and Strauss, on a non -binding basis, that next season (2010-2011) St rauss will apply
SpuDefender on all of their stored potatoes and, moreover, that Straus will organize their storage rooms for our p rot ocol.




                                                                        23
Pimi’s SpuDefender TM installation:
At LFP, Branston farmer - packing for Tesco UK, October 2008:




                                                                24
Pimi’s SpuDefender TM installation at Kraft foods, Ukraine, October 2008:




                                                                   25
Recent Developments

During the last potato season (October 2008-May 2009) we conducted five concurrent efficacy trials in the United Kingdom, Ukraine and
Germany. Potatoes, as well as cabbage, were stored in pilot storage rooms and were treated by Pimi’s solution application prot ocol. In some o f
these trials we have discovered problems in inhib ition of sprouting in some part of the potatoes piles. We have discovered that this problem
relates to high humid ity effects that accelerate sprouting. In order to overcome this problem we have changed our formula and have reduced the
quantity of free water applied on the potatoes. This was achieved by concentrating the formu la and reducing the treat ment per iod. We believe
that due to these changes of the protocol and formula the humidity will be decreased and the effective ness of our product as sprout inhibitor
will improve. For further description of the trials see below:

PepsiCo UK and Ireland

A pilot storage roo m of 350 tons related to Walkers Snacks ltd, a subsidiary of PepsiCo International, was treated by our pro ducts and
technology for Frito–Lay ch ips, in co mparison to CIPC adjacent storage roo m. Management has been informed by PepsiCo th at the quality of
the French fries was found satisfactory by PepsiCo Quality control and the agronomist team as to the frying colo rs of the chips, which is the
main factor in determining the results of the test. Samp les fro m the storage room were tested by an international laboratory for residues, the
results of which were that the residues are in the approved levels of food safety s tandards. PepsiCo has decided, due to the lack of registration
and approval of the SpuDefender as pesticide, not to use the treated crop. PepsiCo has verbally notified us that the use of o ur product as sprout
arrestor interests them and, as of the date of this registration statement, we and PepsiCo UK are p lanning the trial for the comin g potato season.

McCain Food Limited-UK

A pilot storage room of 750 tons of potatoes was treated by our products and technology to be utilized by McCain Food UK, . W e have been
informed by McCain that the potatoes which were treated by our product had been processed by the producer after it was tested by their
quality control, and were found to have the same quality as those which were t reated by CIPC. As some parts of the potato pile have not shown
the same quality as others in controlling sprouting due to humidity, we have decided to adjust our storage protocol in order to avoid high
humid ity. This co ming potato season, we intend to once again apply our products and techno logy in the same roo m in co mparison to CIPC
application in the adjacent roo m.

Kraft Foods

During the potato season of 2008 we installed a pilot storage room at Kraft Foods, Ukraine, one of the lead ing producers of c hips in Eastern
Europe (see also "Customers and Partners" ) . Kraft is following the Scandinavian regulations and standards, limiting maximu m supply level of
CIPC at 25 grams per ton of potatoes per season. Management understands that Kraft is seeking to replace CIPC as a sprout sup pressor in order
to improve the quality, and reduce losses caused by limitation in CIPC usage. The trial has shown that SpuDefender was mo re e ffect ive than
CIPC in controlling the sprouting. Fry colors of the potatoes treated by SpuDefender were at the same level as t hose treated by CIPC. However,
due to humidity problem caused by external high humidity conditions in Ukraine last winter, parts of the potato pile have not shown the same
quality as others in controlling sprouting. Based on the pilot rooms experience we h ave made some changes to our storage protocol to adjust it
to the conditions of high humid ity outside the storage room wh ich was caused by the cold weather conditions as was experience d in Ukraine
this winter. On the basis of this pilot, Kraft Food has decided to extend the pilot usage of SpuDefender TM in the co ming season (September
2009).

Branston Holdings Ltd.

Several varieties of table potatoes weighting 2,000 tons were treated by our product and technology, since September 2009, fo r Branston
Holdings LTD, who is a packager and supplier for Tesco UK. The pilot ended in mid May 2009. Branston informed us that they have foun d the
quality of sprout suppression positive, and have announced, verbally, that they intend to use our product instead of CIPC. To date, Omex is
negotiating with Branston the commercial terms for use of our product at Branston storage facilit ies for the coming season at commercial
volumes.

Treatment of Cabbage (for Marks & Spencer)

Last season (October 2008-June 2009) we treated six storage rooms of cabbage with our products on 3 farming sites in the UK. The cabbage
was stored for intended industrial and retail usage. In one of these rooms we also treat broccoli and cauliflower for ret ail supply to Marks &
Spencer. All of the farmers informed our distributor, Omex Agriculture Ltd., that the quality of the crops were better then t he normal storage
protocol they used. The treated rooms were kept for a longer period than normal storage pro tocol.

RWZ- Wilhelm Weuthen
During the 2008 potato season, we treated a pilot storage room of 1,500 tons related to Weuthen with Spudefender TM (see "Customer and
Partners"). The potatoes treated in these pilot storage rooms were sent to processors of French fries, and we have been advis ed by the
processors that they have not found any quality difference (i.e. fry ing colors, diseases, defects, dry contents) between CIPC treated potatoes and
potatoes treated with SpudDefender TM . Based on the experience gained in these pilot storage rooms, we have changed our storage protocol in
order to adjust it to the requirements of external temperature contro l with cold air. In the co ming 2009 potato season, we will extend the trial to
3-4 storage roo ms of appro ximately 7,000 tons with 5-6 potatoes varieties, in order to test the storage protocol on major potato variet ies which
are consumed in Europe, prior to going out to the market with the SpuDefender TM .

Weuthen has also decided to start a trial with Seed Guard TM on potato seeds in the coming crop season (September 2009) and has expressed
intention to start trials of our StoreGuard TM on other vegetables. As of the date of the filing of this reg istration statement, we are testing, along
with Weuthen, other applications of SpuDefender on potatoes, such as treating table potatoes prior to packing and the treatme nt of potatoes
seed tubers.

Joint Venture with Vegiesafe LLC- USA

To date, Vegiesafe introduced our Joint Venture to major retail chain stores in the U.S., as further described below. These chain stores have, in
turn, introduced us to their suppliers of table potatoes and French fries.

Specifically, Veg iesafe met with executives fro m the Agricu ltural Operat ion division of McDonalds several times during the first quarter of
2009, which has led to our introduction with ConAgra Foods -LambWeston (“ConAgra”) by McDonalds in April of 2009. ConAgra-Lamb
Weston is one of the largest suppliers of McDonalds ’ fro zen French Fries. As a result, this has lead to the planning of an efficacy trial of 30
tons of storage rooms of French fried potatoes, which will be conducted from October 2009 through March 2010 unde r the supervision of a
technical team fro m the University of Main. The trial has been designed and will be inspected by ConAgra ’s guidelin es (according to
McDonalds’ product protocols).

In addition, Vegiesafe met with executives of Target Brands ’ merchandising division several times during the first quarter of 2009, which has
led to our introduction with Potandon Produce LLC (“Potandon”) in April of 2009. Potandon is one of the largest suppliers of Target Brands ’
frozen French Fries. As a result, we are p lanning an efficacy trial of 100 tons storage rooms of table potatoes, which will be conducted from
October 2009 through March 2010 under the supervision of a technical team fro m the University of Wisconsin. The trial is goin g to be
designed and will be inspected by Potandon’s guidelines and in accordance to Target’s product protocols.

Lastly, Vegiesafe met with executives of Frit-O-Lays several a t imes through the first quarter of 2009. Such meet ings occurred pursuant to the
meet ings and feedback fro m Peps iCo UK’s Agricultural Develop ment Unit in connection with the trials held in England during the fourth
quarter of 2008, as discussed under “Customers and Partners” elsewhere in this reg istration statement. Representatives of Frit-O-Lays
introduced Veg isafe to Harland Farms in April of 2009. This has led to the planning of an efficacy trial of 100 tons storage roo ms of chips
potatoes, which will be conducted from October 2009 through March 2010 under the supervision of a technical team of t he Unive rsity of
Wisconsin. The trial is going to be designed and inspected according to Frit -O-Lay’s guidelines (according to the Pepsico’s product protocols).



                                                                          26
Pimi’s SpuDefender TM installation at RWZ Weuthen, Germany, December 2008:




                                                                 27
The Market


In order to facilitate the supply of fru its and vegetables year round, a significant share of fresh produce is put into special long-term storage
houses, and is packed and distributed upon request of food chains and processors. However, unless produce is s tored in controlled conditions
and is properly treated, it will rapid ly deterio rate and become inedib le. Deterioration of fruits and vegetables during stora ge depends largely on
temperature. One way to slow down th is change, and thereby increase the leng th of time fru its and vegetables can be stored, is by lowering the
temperature to an appropriate level. Ho wever, it should be noted that fruits and vegetables can suffer a reduction in quality in lower
temperatures. Moreover, humidity also plays a major factor in helping keep crops fro m withering, while not over saturating them with
humid ity.

Storage Conditions

The main factors that affect storage are:

Temperature : All fruits and vegetables have a 'critical temperature' range, above which they begin to ripe and then rot, and below which
undesirable and irreversible 'ch ill damage' takes place. Carrots, for example, b lacken and become soft, and potatoes suffer fro m cell
de-structuring. Potatoes for example are typically stored at temperatures between 2-4º C for table potatoes, and 8-12 º C for processed potatoes.
Relative hu midity: For most produce, a high but not saturated, relative hu midity is required, e.g. 85 - 95%. This can be achiev ed by sprinkling
the produce with water vapor.

Ventilation : Adequate and unrestricted air movement is also necessary to maintain constant temperature and humidity throughout the storage
pile and for removal of Ethylene and CO 2 fro m the crop, which prevents stress, dehydration loss and decay.

Sprout Inhibition : vegetables such as potatoes and onions are susceptible to sprouting while in storage. Sprouting causes weig ht loss and high
sugar level wh ich in turn reduces the quality of fresh produce, affects the color of fried potatoes and can lead to more dise ases and rotting. As
such the potato processing industry rejects these potatoes.

Shelf Li fe

The shelf life of stored crops can lose up to 50% of their quality if improperly stored. By using our products and technologies, management
believes that the shelf life of s tored crops can be extended. Realistically, post-harvest losses of fresh produce averages approximately 12-15%
in developed countries and between 25% -50% in developing countries (see http://www.postharvestindia.com , see Post harvest Handling of
Fresh Vegetables edited by Tina O'Hare, published 2001 at ACIAR, and see Kader at Acta Horticu lar. 682, ISHS2005 ) .

                                                                         28
Size of the Potato Market

Following is a table of world potato production in tons (annually):

Worl d potato producti on, 1991-2007


                      1991         1993          1995        1997           1999           2001            2003             2005         2007
Countries                                                            million tons
Devel oped               183.13     199.31        177.47       174.63        165.93   166.93          160.97           159.97       159.89
Devel oping               84.86     101.95        108.50       128.72        135.15   145.92          152.11           160.01       165.41
WORLD                    267.99     301.26        285.97       303.35        301.08   312.85          313.08           319.98       325.30
Source: The United Nat ion Food and Agriculture Organization Statistics ("FAOSTAT") at : http://faostat.fao.org

According to the UN Food and Agriculture Organization ("FAO" see http://www.potato2008.org/en/world/index.ht ml) the wo rld pot ato sector
is undergoing major changes. Until the early 1990s, most potatoes were grown and consumed in Europe, North America and c ountries of the
former Soviet Union. Since then, there has been a dramatic increase in potato production and demand in Asia, Africa and Latin America, where
output rose from less than 30 million tons in the early 1960s to more than 165 million tons in 2007. FA O data show that in 2005, for the first
time, the developing world's potato production exceeded that of the developed world. China is now the biggest potato producer , and almost a
third of all potatoes is harvested in China and India.

Top Potato Producers for 2007

                                                                      Picture
     Name of Country                                                                               Quantity (tonnes)
  1.       China                                                                                     72,040,000
  2.       Russian Fed.                                                                              36,784,200
  3.       India                                                                                     26,280,000
  4.       United States                                                                             20,373,267
  5.       Ukraine                                                                                   19,102,300
  6.       Poland                                                                                    11,791,072
  7.       Germany                                                                                   11,643,769
  8.       Belarus                                                                                    8,743,976
  9.       Netherlands                                                                                7,200,000
10.        France                                                                                     6,271,000
Source: FAOSTA T



Potato production, by regions, in 2007:

                                           Harvested area                            Quantity                               Yiel d
                                              hectares                                 tones                             tons/hectare
Africa                                       1,541,498                              16,706,573                               10.8
Asia/Oceani a                                8,732,961                             137,343,664                               15.7
Europe                                       7,473,628                             130,223,960                               17.4
Latin America                                 963,766                               15,682,943                               16.3
North America                                 615,878                               25,345,305                               41.2
WORLD                                        19,327,731                            325,302,445                               16.8
Source: FAOSTAT

Asia and Europe are the world's major potato producing regions, accounting for more than 80 percent of world production in 20 07. While
harvests in Africa and Latin A merica were far smaller, production was at or near record levels. North A merica was the clear leader in y ields, at
more than 40 tones per hectare

Other Vegetables and Fruits
Pimi has completed successful tests of its solution on all fruits and vegetables that are listed in the tables below. During 2009-10, Pimi is
planning to comp lete large scale testing and begin sales of StoreGuard TM for treating on ions and carrots. The following table presents the total
addressable market for Pimi StoreGuard TM for the years 2009-10:

                                                                        29
The followi ng table presents the total addressable market for Pi mi for the years 2009 -10:

Vegetable                                     Produce per annum (billion     Produce per annum (million Storage per annum (million
                                              pounds) ¹                      tons) ²                    tons) ³
Potatoes                                         702                             319                        213
Cabbage & other brassicas                        150                             68                         45
Sweet Potato                                     276                             125                        84
Onions                                           139                             63                         42
Carrots                                          58                              26                         18
Total:                                           1325                            602                        402
¹ Source: FAOSTAT database (08/2008).
² One million cwt = 100 million pounds = 45.45 million tons.
³ Assume 67% o f production is for storage (i.e. none fresh).

The followi ng table presents the addi tional addressable markets for Pi mi for 2010 -11:

Addi tional Fruits & Vegetables               Produce per annum (billion     Produce per annum (million Storage per annum (million
                                              pounds) ¹                      tons)                      tons) ²
Cauliflower & broccoli                           39                              18                         12
Garlic                                           33                              15                         10
Peppers & chilies                                57
Eggplants                                        71                              32                         21
Tomatoes                                         279                             127                        84
Mushrooms & truffles                             12
Asparagus                                        15                              7                          5
Citrus: Oranges, lemons, others                  193
Kiwi                                             3                               1                          1
Avocado                                          7
Mango & guava                                    70                              32                         21
Bananas                                          170

                                                                    30
The Potato Industry

Potato Season Timeline

The following chart describes the potato harvest to storage cycle in the No rthern Hemisphere:




Value Chai n

The potato industry can be roughly divided into two major segments:


  Table (consumed) potatoes.

  Processed potato food products.

Following is a diagram depicting the value chain in the two seg ments of the potato industry.

All of the above offerings and sales were deemed to be exempt under ru le 506 o f Regulation D and Section 4(2) of the securities Act of 1933,
as amended. No advertising or general solicitation was employed in offering the securities. The offerings and sale s were made to a
limited nu mber of persons, all o f whom were accredited investors, business associates of Pimi or executive officers of Pimi, and transfer
was restricted by Pimi in accordance with the requirements of the Securities Act of 1933. In addit ion to representations by the
above-referenced persons, we have made independent determinations that all of the above-referenced persons were accredited or
sophisticated investors, and that they were capable of analy zing the merits and risks of their investment, and that they understood the
speculative nature of their investment.
The processed potatoes are used for French Fries and Chips. The world wide market fo r such products is dominated by large multinational
companies such as McCain, Lamb Western, PepsiCo with the label Frit-o-lays.

                                                                     31
The Need; Di minishing Use of CIPC and Extending Shelf Life

Potatoes by nature will have a dormancy period after harvesting of 2-3 months (depends on the variety). After this period t he potatoes will
starts sprouting. Effective sprout control is a majo r co mponent of managing stored potato quality. If proper sprout control is not maintained,
significant reduction to tuber quality will occur, and the ability to store the product for extended periods of time is dimin ished. Sprouting causes
high yield loss and low quality produce for consumers and fo r processing. Sprout ing is also associated with the conversion of starch to sugars,
which is undesirable in the processing industry, due to the darkening effect of fried products. In the table potato industry, visible sprouts on
potatoes are unacceptable to consumers.

Currently, the primary method to control sprouting in storage is with post -harvest applications of isopropyl N-(3-ch lorophenyl) carbamate
("Chlorpropham" or "CIPC"). CIPC inhib its sprout development by interfering with cell division, thereby causing a hormo nal a ffect on the
potatoes. CIPC is an effective sprout inhibitor although factors such as storage conditions, application technology, and cult ivar can impact that
effectiveness. CIPC penetrates into the potatoes, and it active mode is under the potato skin (sy stemic activity). For the toxic effects of CIPC,
see: http://pmep.cce.cornell.edu/profiles/exto xnet/carbaryl-dicrotophos/chlorpropham-ext.ht ml .

CIPC is a high stable chemical co mpound therefore it has high residue where applied. Today, CIPC is applied in storage rooms as well as in
packing houses before distribution to retailers, therefore its residues can be found on the wall and floors of storage houses , on the processing
lines, in water used for washing the potatoes and also in livestock which are fed with the potato peel s .

CIPC is the most common ly used post-harvest sprout inhibitor in the Un ited States and Europe. However, in August 1996, a federal reg istration
elig ibility decision (RED) for CIPC was issued by the EPA for the continued use of this chemical sprout inhibitor of harvested potatoes in
storage. This decision allowed for a residue tolerance of 50pp m for fresh potatoes entering the market place. Later in 1996, t he Food Quality
Protection Act (the Act) required reassessment of all chemical registered on or before the date of the act and CIPC among t hem. A mandate
issued, in 2002, by the Environmental Protection Agency, from the requirements of the Act resulted in a significant reduction in allo wable
CIPC residue ("Pesticide To lerance") on fresh potatoes in the Un ited States fro m 50pp m to 30pp m per kg. In 2006 the EPA has issued
regulations limit ing the residues on wet peel potatoes (which are used for feeding live stock) to 40 pp m per kg. (See http:// www.epa.go v /, and
"Klien kopf, Gale "Sprout inhibit ion in storage, Current Status, new Chemistry and natural Co mpounds". American Journal of Potato Research,
June 2003),

While EPA establishes the pesticide tolerances it is the US Food and Drug Ad ministration that enforces the maximu m level. FD A routinely
samples food and analyzes pesticide residues. If residues exceed permissible levels then FDA will investigate. If circu mstanc es warrant then
FDA may take legal act ion against those responsible for illegal food residues which could be grower or pesticide manufacturer. For mo re
informat ion on this, see: http://www.fda.gov/bbs/topics/ANSWERS/ANS00643.ht ml .

In Europe, the European Co mmission Direct ive (149/ 2008 of January 29, 2008) limits and sets MRL of 10ppm per kg after use of CIPC. In
official surveys done by the EU, CIPC belonged to the most frequently detected pesticide which significantly exceeds the MRL. Ind icative
exposure assessment for acute risk revealed that the intake of Clorpropham exceeds the Acute Reference Dose (0.5 mg /kg) for children in 3
samples (see: http://www.uni-mannheim.de/edz/pdf/sek/2007/sek-2007 -1411-1-en.pdf ).

The UK Pesticide Safety Directorate has indicated that CIPC might be candidate for substitution, because of its persistence, bio-concentration
ability and/or its high toxicity. (See PSD, May 2008. p. 31 ff:
http://www.pesticides.gov.uk/uploadedfiles/Web_Assets/PSD/Impact_report_final_(May_2008).pdf



Following evidence suggesting that residues of CIPC can be found above the MRL of 10 mg/kg, the UK authorities has adopted, in February
2008, a new regulation under the Pesticide Regulations 1986 (SI 1986/ 1510), under wh ich the product labels of CIPC must be amended in
order to include a warning saying that if the total dose applied is greater than 36g CIPC per ton, then treated potatoes must only be used for
commercial processing. Additionally the industry in the UK has reco mmended that maximu m quantity of CIPC applied for Processed Potatoes
should not exceed 63.75g of Clorpropham per ton (See ”CIPC Stewardship Action Plan" at:
 http://www.certiseurope.co.uk/binarydata.aspx?type=doc/CIPC%20Action%20Plan%202008%20release.pd f ).

In Europe each Member State has its own enforcement authority (such as the AFSCA in Belg iu m, the AFSSA in France and the PSD in the
UK) that is authorized to check up the stored crops and to reject crops which exceeds the MRL Those authorities usually init iate legal actions
against farmers and suppliers who violates the law.

In Sweden CIPC has been banned for use since 2005.

In addition, organic food and organic agriculture is rapidly gaining mo mentu m and is advocating chemical and residue -free use from produce
to storage and maintenance. The Organic Materials Review Institute in the United States (OMRI) is a national nonprofit organization that
determines which input products are allo wed for use in organic production and processing. OM RI Listed or approve d products may be used on
operations that are cert ified organic under the USDA National Organic Program. Per OM RI guidelines, CIPC is not on the approv ed list of the
organic products (see http://omri.org/OM RI_datatable.php?search=cipc ).

                                                                     32
This trend is strengthened by, relatively new, consumer's trend to consume low or non -residue produce which have risen to 20% -25% o f
consumed produce in developed countries like Netherlands. (See "Reducing Residue Rising up Priority List", 78 FGJ 1 February 2008. at:
http://www.bcpcertis.co m/Certis.bcp/English/Ho me/News/page.aspx/565?xf_itemId=522&xf_selectionDatapartId=512 .

Moreover, management believes that the trend in the market, as may be exhib ite d by market leaders, such as Marks & Spencer, Tesco and
Sainsbury in the UK and EDEKA chain in Germany, is to replace, as much as possible, fruits and vegetables treated with chemical which
leave residues with fru its and vegetables with no residue or low residue.

In light of the above-referenced regulat ions, greater environmental consciousness and awareness, as well as feedback fro m agricultural industry
professionals, management believes that once a valid and viable rep lacement is found for chemically -treated fruits and vegetables, further
limits, and perhaps complete replacement of CIPC and other chemicals, will take effect. Management further believes there is an opportunity
for replacing residue-leaving chemicals, such as CIPC, with environ mentally friendly solutions, such as SpuDefender. Accordingly, and
following extensive research, development, and pilot trials, management believes SpuDefender is a viable substitute for CIPC in the treatment
of fru its and vegetables.

Alternative sprout inhibitors to CIPC continue to be evaluated by the industry, including essential oils (e.g., caraway, pepp ermint, spearmint,
clove) or their co mponents (e.g., s -carvone, eugenol) physically damage the developing sprout and suppress sprou t elongation. Ho wever,
repeated or continuous application of these compounds may be necessary for efficacy. Substituted naphthalenes (e.g. d imet hyl naphthalene,
disopropyl naphthalene) may help reduce the amount of CIPC applied or dependency on CIPC for sp rout suppression in storage. To the best of
Management’s knowledge, and based on discussions conducted with individual farmers, farmer's organizat ions, and producers of French frie s
and chips in the U.S. and Eu rope, an effect ive alternative for replacing CIPC, aside fro m SpuDefender, has yet to be presented to the potato
storage-related industries.

It is also common that diseases develop in stored potatoes. The current procedure to deal with this situation is to lower the humidity and dry the
potatoes which, in turn, results in substantial yield losses. Dehydration is also important component as potatoes are losing part of their weight
during storage due to dehydration.

Pimi’s products are targeted at storage facilities that are either owned by farmers, or independent storage providers, or are owned by the food
manufacturers. Pimi’s products provide chemical and residue-free, and an organic certified product as opposed to a CIPC-based treatment and
effective method for preventing rot and decay of in storage and on the shelf thereby significantly extending their shelf life.

Competiti on

SpuDefender

The manufacturers and distributors of CIPC, which SpuDefender is co mpeting with, are large chemical co mpanies such as Cerits Europe B.V,
Lo xan B.V, Aceto Agriculture Chemical Corporation, Un ited Phosphorous limited, Mirfield Sales Services Limited, Standon Chemi cals
limited, Atlas Crop Protection Limited and Whyte Agrochemical LTD. These manufacturers have promoted the "CIPC Stewards hip Action
Plan 2008" for the UK, which was introduced in order to monitor and control the application of the CIPC in order not to excee d the current EU
MRL of 10mg/ kg and at the same time to enable the continued use of CIPC in the UK. We expect significan t competition fro m these
manufacturers and distributors of CIPC.

At the same time, there are several products which aim to substitute the CIPC wh ich are in potential co mpetition with SpuDefe nder TM :

  
    Greenvale, UK launched the Ethylene gas solution that may control sprouts at low dosage. It has been used in some storage rooms in
    Europe. In management ’s opinion the Ethylene has some disadvantages: the frying colors are affected by it, therefore it can be used
    only for table potatoes; it requires relatively expensive equipment for its distribution; and after been released fro m storage accelerated
    sprouting occurs.

   is, Belgiu m launched the Caraway oil ext ract, however, in management ’s opinion , this substitute is not demonstrating an ability to
    Cert
    replace CIPC due to fact that it is not palatable and it affects the fry colors.

   is also manufactures Clove oil which, in management’s opinion, has several disadvantages: The oils affect taste, aroma as well as
    Cert
    cooking and fried taste. To the best of management’s knowledge the Industry banned it due to bad fry colors.

   ● Other product are: 1,4-Dimethylnaphthalene (1.4-DM N) and 2,6-Disopropylnaphthalene: This two synthetic hormones are the
       replicat ion of natural hormones within the potato that induce and prolong its dormancy. This chemicals application in co mbina tion with
       CIPC can control effectively sprouting but has no disinfection capability, to the best of management’s knowledge. The comp ounds are
       several years in the US market with no significant presence.
  
    There are several other hydrogen pero xide products that claim, as Pimi claims, meaningfu l bacteriologic control abilities. To the best of
    management’s knowledge all of these products are based on HP and Acetic & Peracet ic acide. These compounds are used in the food
    industry for more the 60 years and are very effective as disinfectant but limited in scope; in the niche of fru its and vegeta bles the
    application suffers several disadvantages, and in particular they have no long -term effect as disinfectant.

Management believes that the trend in the markets to use environmentally friendly products, which are residue free, o r low re sidue, and to
replace the subsisting chemicals which are high residue, together with the trend o f the regulators to reduce the u sage of high residue chemicals
(such as CIPC), will cause potato growers and potato storing companies to prefer Spudefender , and therefore the price o f Spu defender will not
be the major co mponent in the decision to utilize SpuDefender in place of CIPC-treated products. Therefore, management believes that
although the company anticipates selling SpuDefender at higher prices than CIPC (at $5 -7 per ton for SpuDefender per storage season,
compared to $2-4 per ton of potatoes for CIPC treat ment per season) price difference will not be a major factor in co mpetition. Furthermore, in
order to co mpete in the market with co mpetitors that have greater financial resources, the company has taken steps to differe ntiate its products
and has created the joint venture with Vegiesafe LLC, in the U.S., which launched the Vegiesafe consumer brand, marking residue free fruits
and vegetables in the U.S.

SeedGuard

We anticipate Seed Guard to co mpete with manufacturers of chemicals wh ich are currently used by the industry, such as: Imazalil, Fungizil,
Celest, Monceren, Amistar and Mancozeb. These products are manufactured by chemical producer's giants such as Bayer Crops cience AG
which produces Moncern, Dow Agroscience which produces Mancozeb, and Syngenta AG wh ich produces Celest, and by many other chemical
manufacturing co mpanies. The Co mpany expects vigorous competition fro m these companies.

To management's best knowledge, the cost of treatment with Celest could amount to $90 per one ton of potato seeds. The cost of treatment of
one ton- of potato seeds with Monceren could amount to $50, and the cost of treatment with Mancozeb could amount to $30 per ton of pot ato
seed tubers. At times, the potato seed producers and growers of potatoes require the use of all of the above chemicals before plan ting, which
could amount to an average of $100 to $150 per ton of potato seed tuber per season. We aim that SeedGuard would replac e all of the above
chemicals, and therefore we may be able to receive the price of $30 per treat ment of one ton of potato seeds, which we estima te to be a
competitive price.

We believe that Seed Guard will receive the support from regulators and seed growe rs, who will prefer environ mentally friendly products to
high residue subsisting products, thereby increasing our competitive advantage.

StoreGuard

Management believes there are currently no other products, which claim to have the qualities of our StoreGuard, in extending shelf life of
vegetables and fruits and at the moment we do not expect direct co mpetition with this product.

                                                                        33
Strategy

SpuDefender

We have established different market entry strategies for Europe and the U.S. In Europe the awareness of retailers and food p rocessors and
farmers to replace CIPC and other residue products is high, therefore our Strategy for market -entry and short-term strategy for Europe consists
of:

 mmercial beta trials demonstrating product efficacy in selected crops (potatoes, cabbages, onions, etc.);
  Co

  Selection of local distributors/strategic partners;

  Registration and regulatory approvals of the product;

  Product sales to:
    o Industrial p roducers;
    o Storage providers;


In the U.S. where the awareness of CIPC and other residue in fruits and vegetables is relatively low, our strategy to establish a foothold in the
market is by convincing retailers, such as market leaders and leading fast food chains, to adopt CIPC-free potatoes as their standard.
Management believes that once market leaders will adopt the standard of CIPC free potatoes, the industry in general will follow. For this
reason we have established our Joint Venture with Vegiesafe LLC whose mother company Earthbound LLC is engaged in consulting to mass
market retailers and major supermarket chains in North A merica in brand development. Our Joint Venture has contacted already with major
retail chain stores and fast food chains in the U.S.
EB's team met with McDonald's executives a couple of times during first quarter of 2009 and the company has put us in touch with ConAgra
Foods- LambWeston during April 2009. EB's team met with Target Brands LLC - their executives a couple of times during the first quarter of
2009 and the company has put us in touch with Potandon Produce L.L.C during April 2009. EB's team met with Frit -O-Lay- executives a
couple of times during the first and the second quarters of 2009. Further to the meetings and the input fro m PepsiCo UK o n th e trials held
during 2008, the company has put us in touch with Harland Farms during March 2009.

Once we establish a foothold in the market, we will attempt to establish strategic relations with several large distributors and licensed firms
who already have a regional distribution network. This will enable us to rapidly increase our global market share and coverage without
investing in building a global distribution network fro m scratch. At this stage, based on this model, we will imp lement the k now-how of our
technology to these strategic partners which will be responsible for ordering the product from our OEM manufacturer and focus i n marketing
and sales activities, enabling us to focus on developing additional products. The distributors will also be in charge of the market ing of our
products, and we intend that each distributor will be obligated to min imu m sales. We intend to support our distributors with research and tests
results and professional publication on our products. We will also support our distribu tors in education of the market, in regulating of our
product and in professional advice. We will also contribute to participations in conference in exhib itions where our d istribu tors and us will
present our products.

We plan to sell the SpuDefender TM to farmers and growers, storage providers and industrial food producers. In itially, we will sell our p roducts
through local d istributors who serve this target market. These distributors are familiar with installation and maintenance of storage management
systems and can also provide professional services (i.e. design, consulting, etc.) to storehouses. SpuDefender TM is manufactured and packaged
by a leading, certified European manufacturer for the European market. Once we will start sales in North A merica th e product will be supplied
under OEM agreement in the states by Solvay International S.A (see “Manufacturing Process Supply of Raw Materials ”

This multinational producer of Hydrogen Pero xide is able to also supply the company ’s needs in Asia as well. Pimi’s distributors will purchase
the SpuDefender TM solution from us and deliver it fro m our supplier to its facility and distribute it to the farmer/storage provider. The
distributors will be trained by our technical team and will be responsible for reco mme nding, training, and optionally also designing and
installing the required fogging system that distributes Spudefender in the storehouse. For customers who do not have a requir ed fogging
system, we and our distributors will either provide one at a cost to be determined or alternatively, bundled with a minimu m order of
SpuDefender TM .

SeedGuard

Growing and producing seeds is a very complicated and professional section of agriculture. Therefore it is controlled by larg e companies wh ich
are able to develop, register and produce seed varieties. In Europe, the production and distribution of potato se ed tubers is controlled by large
producers such as HZPC fro m Dutch, Europlant fro m Germany and Cateness from Scotland. We have already approached several of t hese
companies and they have shown interest in SeedGuard. It will require that we shall show the e fficacy of Seed Guard to these seed producers,
which we estimate will require at least two potato seeds seasons.

We intend that the same distributors of SpuDefender will also distribute our Seed Guard.
StoreGuard

Our StoreGuard is aimed to be sold to farmers and storage companies of vegetables such as cabbages, cauliflower and broccoli. In order to
penetrate this market we have to show efficacy of StoreGuard to such farmers and storage companies. We have already made efficacy tests of
StoreGuard with several farmers in the UK, which have shown satisfying efficacy.

We intend that the distributors, who will be appointed for SpuDefender, will also market and distribute StoreGuard. These dis tributors will be
in charge of its supply and the installation of the equip ment which will be required for the applicat ion of StoreGuard.

Empl oyees

At the date of this registration statement, we emp loy 5 fu ll-time employees. We intend to employ regional desk managers for each region we
will be active in.

Corporate Development

Subject to fund raising and regulatory approvals, management plans to expand the Company ’s activity in the U.S., East Europe and Asia. The
expansion to East Europe and Asian regions will be by nominations of desk managers to handle the sales for the Company’s products within
these regions. The Company also intends to enter into distribution agreements with regional distributors or international cor porations who are
active in these regions.

In order to execute our expansion plan to the U.S., we intend to establish a subsidiary that will undertake the development, marketing and
technical support of the sales of our products within the U.S. Management intends that this subsidiary will also participate in the Joint Venture
with Vegiesafe for the marketing of SpuDefender TM and StoreGuard TM . The subsidiary will emp loy special product managers and the necessary
staff to handle the development of Seed Guard within the U.S.

Di vi dends

We have not declared any cash dividends on our common stock since our inception and do not anticipate paying such dividends in the
foreseeable future. We p lan to retain any future earnings for use in our business. Any decisions as to future payments of div idends will depend
on our earnings and financial position and such other facts, as our Board of Directors deems relevant.

                                                                       34
Report to Sharehol ders

As a result of this offering, and the effectiveness of this registration statement, we will become subject to the informat ion and reporting
requirements of the Securities Exchange Act of 1934 and will file current reports, periodic reports, annual reports, and other information with
the Securities and Exchange Co mmission, as required. Currently, the Co mpany does not expect to file a 1934 Act registration s tatement.
Accordingly, and because at this time we are not going to be registered under the Securities Exchange Act of 1934, we will not be subject to
proxy rules or Section 16 of the 1934 Act, until such time as we do file 1934 Act registration statement.

                                                         DES CRIPTION OF PROPERTY

The Co mpany and its subsidiary currently lease office space at Kibutz Alonim. The Co mpany currently pays monthly rent of $552 (NIS 2,100)
plus VAT per month pursuant to a 12 month lease with an option to additional 12 month, effect ive as of December 30, 20 08.

                                                              LEGAL PROCEEDINGS

Fro m t ime to t ime we may be a defendant or plaintiff in various legal proceedings arising in the normal course of our b usines s. We are
currently not a party to any material pending legal proceedings or government actions, including any bankruptcy, receivership, or simila r
proceedings. In addition, management is not aware of any known litigation or liab ilit ies involving the owner of our property or the
manufacturer o f our products that could affect our operations. Should any liabilities incurred in the future, they will be ac crued based on
management’s best estimate of the potential loss. As such, there is no adverse effect on our consolidated financial position, results of operations
or cash flo w at th is time. Fu rthermore, management of the Co mpany does not believe that there are any proceedings to which an y director,
officer, o r affiliate of the Co mpany, any owner of record of the beneficially or more than five percent of the co mmon stock of the Co mpany, or
any associate of any such director, o fficer, affiliate of the Co mpany, or security holder is a party, wh ich may be adverse to the Co mpany or has
a material interest adverse to the Company.

                                                                  MANAGEMENT

Directors and Executi ve Officers

The follo wing table sets forth the names and ages of the members of our Board of Directors and our executive officers and the positions held
by each, as of June 30, 2009. The board of directors elects our executive officers annually. A majority vote of the directors wh o are in office is
required to fill vacancies. Each d irector is elected for the term o f one year, and until his or her successor is elected and qualified, or until h is or
her earlier resignation or removal.

                    Name                                             Age                                         Position
Alon Carmel                                                           54                        Chairman of the Board
Youval Saly                                                           51                        Chief Executive Officer
Avi Lifshitz                                                          51                        Chief Financial Officer
Nimrod Ben Yehuda*                                                    56                        Chief Technology Officer, Director
Doron Shorrer                                                         55                        Director
Rami Treger                                                           51                        Director
* Aside from Mr. Nimrod Ben Yehuda, there is no other director who is also an officer or employee of the Co mpany.

Alon Carmel

Mr. A lon Carmel is the Chairman of the Board of Directors, and has served as such since September 2008. Alon Carmel co -founded Spark
Networks (AM EX:LOV) in 1998, which created and runs such websites as JDate.co m, Cup id.co.il, A mericanSingles.com, among others. Prior
to co-founding Spark Networks, Mr. Carmel en joyed a successful career in real estate from 1983 until 1991. Since lea ving Spark Networks in
2005, M r. Carmel has invested in a wide range of early stage start-ups which are mainly internet technologies. He is a graduate of the Technion
University, Haifa, Israel as practical civil engineering.

Youval Sal y

Mr. Youval Saly is our Ch ief Executive Officer, and joined the Co mpany in November 2007. In 2007, prior to jo ining the co mpany he was the
CEO of High-Tech Lip ids LTD a Biotech Co mpany. Fro m 2005 to 2007 M r. Saly was the founder and served as CEO of Aqua Solutions Ltd
which developed detergent-free industrial laundry systems. Fro m 2002 until 2005 Mr. Saly served as the marketing and sales manager in
Europe at Galam Ltd. a co mpany which is an Israeli market leader in the manufacture of Fructose, Glucose and Starch. From 200 1 until 2002
Mr. Saly was the vice president of marketing and sales of Spandex Israel Ltd - a textile company. Prev iously Mr. Saly served as the marketing
and sales manager of Haifa chemicals Ltd fro m 1997-2001, and was the Chief Technologist of “Pri Hagalill”- the biggest fruit and vegetable
processor in Israel, fro m 1992 until 1997. Fro m 1987 until 1992 Mr. Saly was a head technologist in "Alkol" and from 1985-1987 served as a
technologist in "Pri Haemek". Youval Saly earned a B.Sc. in Biotechnology and Food Engineering fro m Technion Institute, Haifa , Israel.


                                                                    35
Avi Lifshitz

Mr. Avi Lifshit z is our Chief Financial Officer, and brings to Pimi more than 25 years of experience in accounting, finan ce a nd business
management. Mr. Lifshit z is serving for 16 years as CFO of Jordan Valley Semiconductors Ltd which is preparing its fina n cial statement in
accordance with the US GAAP. He is the Secretary of Jordan Valley Semiconductors UK Ltd and Jordan Valley Semi Conductors Gmb h
(Germany). He has joined Meiri-Lifshitz Accounting firm in 1990 and is a partner since then. Mr. Lifshit z is a d irector in Bede Scientific Inc
(US) in Efrat Consultants Ltd (ISR) and in Ed-Wise Ltd (ISR). Mr. Lifshit z teaches at the Technion-Israel Institute of Technology where he
won an award for excellence in 1998. He is certified as a public accountant in Is rael, and holds a B.A. in economics and accounting fro m Haifa
University.

Nimrod Ben-Yehuda

Mr. Nimrod Ben-Yehuda is our Chief Technology Officer responsible for developing the Co mpany ’s technology, and also serves as a member
of our Board of Directors. During the past 18 years, Mr. Ben -Yehuda has been a leading entrepreneur in the field of environment friendly
solutions using STHP in many applications. He is the Co-Founder of Pimi and was the inventor of its IP and products. Fro m 1986-1989 served
as Joint CEO of NitroJet LTD, fro m 1989 until 2003 served as CEO of Nir Ecology which develops ecological solutions for veterinary, food
industries and hospitals and fro m 1993 until 2003 serves as joint CEO and CTO of Swissteril Water Purifications Ltd wh ich dev eloped a
protocol for purificat ion of water. Since 2003 until today he serves as CTO of Pimi Israel.

Doron Shorrer

Mr. Do ron Shorrer is a member of our Board of Directors. Mr. Shorrer is also currently Chairman and CEO of Shorrer Internatio nal Ltd.
(Investment and financial consulting) in which he has been serving in such capacities since 1998, and has been a member of t he boa rd of AIG
and Omer Insurance Co mpanies in Israel since 2006, 2008 respectively. Fro m 2005-2007 Mr. Shorrer was Chairman of Lito Group
(industrial). Fro m 2003 until 2006 M r. Shorrer was the Chairman o f Pluristem Life System, Inc. (b io -technology ), and he still serves as
member of the board of this company. From 2004 -2005 M r. Shorrer served as the Deputy Chairman of Milo mor (construction), and from
2002-2004 Mr. Shorrer served as Chairman of the Israeli Phoenix Insurance Co mpany, among others. From 1995 to 1998, Shorrer served as
Co mmissioner of Insurance & Capital Markets, Director of Capital Markets, Insurance and Savings at Israel's Ministry of Finan ce. Prior to that,
Mr. Shorrer was Director-General o f the Ministry of Transport. Mr. Shorrer has a BA in Economics and Accounting and an MA in Business
Admin istration fro m the Hebrew Un iversity of Jerusalem; He is a Certified Public Acc ountant.

Rami Treger

Mr. Treger is currently finalizing CEO position at A miad Filtrat ion System LTD wh ich is one of the Agro filters leading supplier in the world
and whose shares are traded in the AIM stock exchange in the UK. Prior to this he founded on December 2006 a Sano Trans, chemical trading
company with Sano Israel LTD one of the leading chemical co mpanies in Israel. Fro m 2004-2006 he served as CEO o f Zohar Dalia Ltd, the
local partner of Ecolab in Israel. Zohar Dalia is the Israeli leader in industrial detergent solut ions and raw material with a turn over above
$50M. In 2000-2004 he was the CEO of Sasa Tec, formu lator and packer of chemical cleaning compounds. Mr. Treger was a region manager
in Haifa Chemicals for the Far East where he made relocation to Thailand and e stablished a very successful operation in its region. Rami
Treger has a BA in Economics and Accounting, and MBA in Business Admin istration fro m the Hebrew University of Jerusalem,

Empl oyment Agreements

Pimi Israel has entered into separate employ ment agreements with several of its executive officers, namely, Mr. Youval Saly, Mr. Nimrod Ben
Yehuda, Mr. Avi Lifshit z. We have also entered into employ ment agreements with two of our emp loyees under regular terms of emp loyment.
There are no special collective e mp loy ment agreement which relate to us and our employees.

Mr. Lifshit z and Mr. Saly are not entitled to any severance payments in case of dis missal under their emp loy ment agreement, t heir monthly
payment includes the severance pay, all taxes, national insurance, pension fund, or any other social insurance and/or benefits.

Mr. Ben Yehuda is entitled upon termination of his emp loy ment with Pimi Israel to severance pay; the severance pay is based o n the most
recent salary multip lied by the number of years of employ ment. Mr. Ben Yehuda is entitled to one month's salary for each year of employ ment,
or a portion thereof. As of November 2005, upon commencement of employ ment, Pimi Israel has purchased executive insurance for Mr. Ben
Yehuda and makes monthly depos its to this insurance policy, wh ich is equal to 8.333% of his monthly salary to cover its obligation towards
severance payments. In additions Pimi Israel pays each month, 5% of M r. Ben Yehuda's salary under the insurance policy for p ension plan, and
the Mr. Ben Yehuda deposits an additional 5% of his salary to the pension plan. The liability of the Co mpany against Mr. Ben Yehuda
termination of emp loy ment is fully provided for .

Potential Payments Upon Termination or Change-in-Control
The follo wing table sets forth informat ion regarding potential payments and benefits of our officers would receive upon termination of
emp loyment under specified circu mstances, assuming that the triggering event in question oc curred on December 31, 2008, the last business
day of the fiscal year:

    Name               Voluntary                                                                                           Involuntary
                       Resignation        Voluntary                    Involuntary             Involuntary                 Termination
                        w/ o Good       Resignation for                Termination           Termination with             wi th a Change
                         Reason          Good Reason                  wi thout Cause              Cause                     in Control
Youval Saly
Cash severance     $          None      $          None (1)       $             None (1)    $             None        $             None (1)

Vesting of stock   $         14,876     $         14,876          $           14,876        $             None        $            14,876
options
Avi Lifshitz
Cash severance     $          None      $          None (1)       $             None (1)    $             None        $             None (1)

Vesting of stock   $          1,426     $          1,426          $             1,426       $             None        $             1,426
options

Nimrod Ben
Yehuda
Cash severance     $         24,110     $         24,110 (1)      $           24,110 (1)    $             None        $            24,110 (1)


    (1) This amount reflects the lump sum that is payable within thirty days of the triggering event to the named executive. A ll calculations
        were made as of December 31, 2008 using then current salary figures for the named executive.

                                                                       36
                                                            EXEC UTIVE COMPENS ATION


    Summary Compensati on Table

    The following table sets forth informat ion regarding co mpensation paid to our p rincipal executive officer, principal financial officer, and our
    highest paid executive officer, all o f whose total annual salary and bonus for the years ended December 31, 2008, 2007 and 20 06 exceeded
    $100,000

                                                           SUMMARY COMPENSATION TABLE

      Name and                                                                                                Change in pension value and
      principal                                                                        Non-equity incentive     non qualified deferred        All Other
       position           Salary       Bonus       Stock Awards       Option awards (4) plan compensation           compensation            Compensation       Total
                   Year    ($)          ($)             ($)                ($), (a)            ($)                        ($)                    ($)            ($)

    Youval Saly,   2008    119,715-            -                  -          (8) 35,174-                  -                             -                  -   154,889
    Chief
    Executive
    Officer (1)    2007       7,800-                                                                                                                            7,800-

                                                                                                                                                                    (5)
    Avi Lifshitz, 2008        7,891-           -                  -            (9) 4,821-                 -                             -                  -    12,712
    Chief Financial
    Officer (2)

    Nimrod
    Ben-Yehuda,    2008     119,900-           -                  -                     -                 -                             -           12,615     131,615
    Chief
    Technology                                                                                                                                                      (6)
    Officer (3)    2007    112,592 -           -                  -                     -                 -                             -            9,109     121,701
                                                                                                                                                                    (7)
                   2006     95,289 -           -                  -                     -                 -                             -            8,409     103,698




) Dr.(1). Mr. Saly has started to be employed by us on December 2007.
     (2). M r. Lifshit z has started to be employed by us on November 2008.
     (3). M r. Ben Yehuda has started to be employed by us in 2005.
     ( 4) For the assumptions made in the valuation of the options see note 8B. to the financial statements.
     (5) Including an amount in the sum of $ 3,984 wh ich was not paid and was recorded as a loan Mr. Lifshit z granted the Co mpany
     (6) Including an amount in the sum of $ 11,979 which was not paid and was recorded as a loan Mr. Ben Yehuda granted the Company.
     (7) Including an amount in the sum of $ 594 wh ich was not paid and was recorded as a loan Mr. Ben Yehuda granted the Co mpany.
     (8) M r. Saly was granted 311,773 options for 311,773 Co mmon Stock shares to be vested in 16 quarters starting as of December 2007, each
     quarter 19,486 shares.
     (9) M r. Lifshitz was granted 62,355 options for 62,355 Co mmon Stock shares to be vested in 16 quarters starting as of October, 2008 each
     quarter 3,897 shares.

    Youval Slay-CEO

    Pimi entered into an Employ ment Agreement on November 27th, 2006 with Mr. Saly. On October 29, 2008, we entered into an Addendum to
    the Employ ment Agreement. Mr. Saly is entitled to total compensation of 50,000 NIS ($11,939) p lus VAT per month fro m the month of
    October 2008. This consideration is paid against VAT receipt and covers all social benefits, car maintenance and cellular pho ne expenses of
    Mr. Saly. M r. Saly has taken upon himself the payment for the social security, the pension fund and any other social insurance and benefits.
    Pimi has paid Mr. Saly the total su m o f 437,400 NIS ($119,715) in 2008 and the sum of 150,000 NIS ($36,989) in the first quar ter of 2009, as
    consideration under his employment agreement. Mr. Saly devotes approximately 180 hours a month in connection with his full-time
    emp loyment with the Co mpany, and devotes 100% of his working time to the business and affairs of the Co mpany.

    In addition M r. Saly is entitled to options under the ESOP of Pimi Israel fo r 2008 in the total amount of 311,773 options for 311,773 Ord inary
    shares to be vested in 16 quarters starting as of December 2007, each quarter 19,486 shares . The exercise price per each Ordin ary share is 0.01
    NIS. The options were converted into 311,773 options for 311,773 co mmon stock shares of our co mpany under our 2009 Share Incentive Plan
    with an exercise price of $ 0.01 for each option share and the same vesting period.

    Nimrod Ben Yehuda - CTO
According to an agreement dated November 13, 2005, as amended on November 16, 2006, and of April 28, 2009, Mr. Ben Yeh uda has been
appointed as Pimi's CTO. Mr. Ben Yehuda is entitled to a monthly gross salary of 25,000 NIS ($5,969), plus benefits such as executive
insurance, education fund at the rate of 10 % (7.5% contribution by us), and disability insurance. Furthermore, Mr. Ben Yehuda is entitled to a
credit card fo r approved expenses, including traveling expenses, a fully paid rental car (including taxes assessed for privat e use) and a mobile
phone which will be fu lly covered by the Co mpany. Under the addendum of November 16, 2006, M r. Ben Yehuda ’s net salary was reduced by
the sum of 3,000 NIS ($695). The reduction was considered as a loan by Mr. Ben Yehuda to us. We undert ook to pay this loan to Mr. Ben
Yehuda after a new investment of not less than $500,000 at a valuation of not less than $3,000,000, o r in case of another eve nt causing Pimi to
receive an inco me of more than $500,000. Pimi Israel has paid to Mr. Ben Yehuda the debt accrued for the reduced salary on December 2008.
Mr. Ben Yehuda devotes approximately 180 hours a month in connection with his full -time employ ment with the Co mpany, and devotes 100%
of his working t ime to the business and affairs of the Co mpany.

Pimi has paid Mr. Ben Yehuda the total sum of 455,860 NIS ($119,900) in 2008 and a total sum of 114,818 NIS ($28,313) in th e first quarter
of 2009.

Avi Lifshitz- CF O

Pimi has entered into a Personal Service Agreement in November 2008 with accountant A vi Lifshitz. Mr. Lifshitz and Ad wise Ltd., a co mpany
under the control of Mr. Lifshit z ("Ad wise"), under which Ad Wise and Mr. Lifshitz are entit led together to a total consider ation of 10,000
NIS ($2,388) plus VAT per month as from October 2008. Until t he date of which Pimi raises capital fro m an external investors for a sum
exceeding $1,000,000, Pimi shall pay Mr. Lifshitz and Ad wise, on behalf of the consideration, a sum of 5,000 NIS ($1,194) pl us VAT, and the
balance of the consideration shall accrue to the credit of the Mr. Lifshitz and Ad wise and shall be paid to them after the raising of capital as
aforesaid. The consideration to Mr. Lifshitz is paid as salary and the consideration to Ad wise is paid against VAT receipt, t he consideration
shall not exceed the amount of 10,000 NIS p lus VAT. The consideration covers taxes, national insurance, pension fund and/or any other social
insurance and/or benefits, car maintenance and cellular phone expense. Pimi expenses amounted to the total sum of 30,000 NI S ($7,891) in
2008 and the total sum of 30,000 NIS ($7,398) in the first quarter of 2009, under this Personal Service Agreement. M r. Lifshitz's works
approximately 36 hours a month in connection with the business and affairs of the Co mpany and his position is considered to be part-time. Mr.
Lifshitz devotes approximately 20% of his working time to the business of the Company.

In addition Mr. Lifshit z is entitled to options under the ESOP for Israel for 2008 in the total amount of 62,355 options for 62,355 Ord inary
shares to be vested in 16 quarters as of October, 2008 each quarter 3,897 shares. The exercise price per each Ordinary share is $0.72 per share.
The options were converted into 62,355 options for 62,355 co mmon shares of our company with the exercise price of $0.72 for each common
share, and the same vesting period.


                                                                        37
In addition Mr. Lifshitz received options under the ESOP for Israel for 2008 in the total amount of 62,355 options for 62,355 Ordinary shares
to be vested in 16 quarters as of October, 2008 each quarter 3,897 shares. The exercise price per each Ord inary share is $0.7 2 per share. The
options were converted into 62,355 options for 62,355 co mmon shares of ou r company under our 2009 Share Incentive Plan with the exercise
price of $0.72 for each common share, and the same vesting period.

Outstandi ng Equity Awards at Fiscal Year-End

The following table sets forth informat ion with respect to the outstanding equity awards of our principal executive officers a nd principal
financial officer during 2008, and each person who served as an executive officer of the Co mpany as of December 31, 20 08:

                                          OUTSTANDING EQUITY AWARDS AT YEAR-END
                                             Option awards                                                           Stock awards
                                                                                                                                     Equity
                                                                                                                       Equity      incentive
                                                                                                                      incentive plan awards:
                                                                                                    Number              plan      Market or
                                                   Equity incentive                                     of Value of awards:      payout value
                                                         plan                                        shares shares Number of of unearned
               Number of        Number of          awards: Number                                   or units or units unearned shares, units
                securities       securities          of securities                                  of stock of stock shares        or other
               underlying       underlying           underlying          Options                      that     that other rights rights that
               unexercised      unexercised          unexercised         exercise          Option   have not have not that have     have not
Name and        options (#)      options (#)            options            price         expiration vested vested not vested         vested
principal
position     Exercisable       Unexercisable            (#), (a)            ($)             Date       (#)     ($)          (#)          ($)
Youval Saly,
Chief
Executive                                                                                December 1,
Officer (1)        77,943               233,830               311,773             0.01      2017       None     None -                           -

Avi Lifshitz
Chief
Finance                                                                                   October 1,
Officer (2)           3,897              58,458                62,355             0.72      2018       None     None -                           -


( 1) Mr. Saly is the Ch ief Executive Officer as of December 1, 2007. Mr. Saly was granted 311,773 options for 311,773 Co mmon Stock shares
to be vested in 16 quarters starting as of December 2007, each quarter 19,486 options.
(2) Mr. Lifshitz is the Ch ief of Finance Officer as of October 1, 2008. M r. Lifshitz was granted 62,355 options for 62,355 Ordinary shares to be
vested in 16 quarters starting on October, 2008 each quarter 3,897 options.


OPTIONS/SARs GRANTS DURING LAST FISCAL YEAR

The below d isclosure pertains to the Company’s wholly-o wned subsidiary, Pimi Agro Cleantech, Ltd., a co mpany formed under the laws of the
state of Israel:

2008 Pimi Israel Shares Option Pl an

Pimi Israel’s 2008 Shares Option Plan (the "Pimi Israel Plan") was established as an incentive to retain Pimi's board of directors, employees
and consultants whose services are considered valuable. Subject to adjustments as provided in the Pimi Israel Plan, a total o f 623,547 Ord inary
Shares NIS 0.01 for each share of Pimi Israel (the “Shares”) were subject to the Pimi Israel Plan. Upon the exercise of Options granted under
the Pimi Israel Plan, the optionee shall have no voting rights as a shareholder until the consummat ion of a public offering o f the Co mpany’s
Shares. All Shares issued upon exercise of the Options shall entit le the holder thereof to receive div idends and other distributions thereon. Pimi
has entered into six Option Agreements with the following Office Ho lders: Mr. Saly, Mr. Shorrer, and Mr. Lifshit z, along with two members of
the Advisory board: Prof. Nach mias and Prof. Chet, and with one of its employees, all of who m together were granted a total o f 561,191
options.
As a result of Pimi’s acquisition of Pimi Israel on April 27, 2009, the 561,191 options granted under the Pimi Israel Plan were exchanged for
561,191 options of Pimi pursuant to the 2009 Pimi Share Incentive Plan (described below).

2009 Pimi Share Incenti ve Plan

On April 27, 2009, the Co mpany adopted the 2009 Share Incentive Plan (the "2009 Share Incentive Plan"), pursuant to which Pimi is
authorized to issue 3,000,000 shares of Co mmons Stock, subject to the terms and limitat ions set forth in the 2009 Share Incen tive Plan. The
purpose of the 2009 Share Incentive Plan is to offer an incentive to employees, directors, officers, consultants, advisors, suppliers and any other
person or entity whose services are considered valuable to the Company, as well as to replace the Pimi Israel Plan

Upon the adoption of the 2009 Share Incentive Plan, the Co mpany issued 561,191 options to 3 employees, one director and 2 consultants who
had options under the Pimi Israel Plan.

Investment Agreement with Earthbound LLC

On January 20, 2009 an investment agreement (the “Investment Agreement”) was entered into between Pimi Israel and Earthbound LLC a
Limited Liability Co mpany registered in Delaware ("EB"). It was agreed that EB will invest the total sum of $300,000 the in ve stment will be
paid to Pimi in tranches as follows: first tranche of $60,000 was paid on March 15, 2009. The balance of $240,000 will be paid in four
installments as follows: $60,000 on June 15, 2009, $90,000 on September 15, 2009 and $90,000 on January 15, 2010. EB will rec eive the
allocated shares pro rata to the Investment against each installment of the Inve stment. As of the date of the filing of th is registration statement,
EB has invested a total of $60,000 and received 45,328 Ordinary Shares of Pimi Israel which were exchanged to 45,328 shares of Co mmon
Stock of the Co mpany. On June 15, 2009 EB has paid the second tranche, against issuance of 45,328 shares of common stock of the Co mpany .

On May 3, 2009 we issued to Earthbound LLC a warrant for the purchase of 145,985 Co mmon Stock shares of the company at the pr ice of
$1.37 per share to be exercised until June 15, 2009. The warrant was extended until August 31, 2009. The warrant has been granted to EB in
furtherance of the Investment Agreement as further incentive to EB to increase their investment in the Co mpany.

Opti ons granted to Investors in Pi mi Israel

In June 2008, two investors of Pimi Israel received options to purchase up to 239,193 Ord inary Shares of NIS 0.01 no minal value each, of
Pimi Israel for the price of $0.695 per share until June 30, 2009. On Ap ril, 27 2009 it was agreed that the options will be converted into options
to purchase 239,193 Co mmon Stock Shares of the Company at the same price until June 30, 2009. Until June 30, 2009 the options were not
exercise and therefore expired.

Exercise of Opti ons in Pi mi Israel Shares

In 2008 Pimi Israel issued 769,526 options to several investors exercisable until February, 28 2009. As of February 28, 2009, a total of 201,972
Options were exercised for a total sum of $145,000 and, consequently, the rest of the Options have expired .

DIRECTOR COMPENS ATION

The Co mpany’s directors currently serve without compensation, except for Mr. Doron Shorrer, to who m options were granted under the
Co mpany’s 2009 Share Incentive Plan in exchange for the cancellat ion of options under the Pimi Israel Plan, and Mr. Rami Treger to whom
options were granted under the Company’s 2009 Share Incentive Plan in exchange.\

                                                                                       Change in Pension
                               Fees                                                       Value and
                             Earned                                                      Nonqualified
                             or Paid      Stock       Option            Non-Equity         Deferred                 All Other
    Name                     in Cash     Awards       Awards          Incentive Plan    Co mpensation             Co mpensation          Total
                    Year        ($)        ($)         ($)(3)        Co mpensation ($)     Earnings                    ($)                ($)
Doron
Shorrer (1)        2008       None        None               1,292          None                  None                  None                 1,292

Rami Treger
(2)                2008        None       None              None            None                  None                  None                None

(1) Mr. Shorrer was granted 31,177 options for 31,177 Ord inary shares to be vested in 8 quarters as of December, 2008 each qu arter 3,897
options.
(2) Mr. Treger was granted 31,177 options for 31,177 co mmon shares to be vested in 8 quarters as of July 1, 2009, each quarte r 3,897 options.
Therefore, in 2008 Mr. Treger did not receive any options.

(3) The fair value of options granted under the plan was estimated at the date of grant using the Black-Scholes option pricing model. The
following are the data and assumptions used:

Div idend yield (%)                                                                                                                     0
Expected volatility (%) (*)                                                                                                            50
Risk free interest rate (%) (**)                                                                                                        3
Expected term of options (years) (***)                                                                                                5-7
Exercise price (US dollars)                                                                                                    0.01/ 0.72
Share price (US dollars)                                                                                                        0.2/0.72
Fair value (US dollars)                                                                                                        0.19-0.26

 (*)     Due to the fact that the Co mpany was a nonpublic entity, the expected volatility was based on the historic volat ility of publ ic
         companies which operate in the same industry sector (agricu ltural chemical industry).

 (**)    The risk free interest rate represents the risk free rate of US$ zero – coupon US Govern ment Bonds.

 (***) Due to the fact that the Company does not have historical exercise data, the expected term was determined based on the "simplified
       method" in accordance with Staff Accounting Bulletin No. 110.


 Doron Shorrer- Director

Mr. Shorrer is entitled to options under the ESOP for Israel for 2008 in the total amount of 31,177 options for 31,177 Ordin a ry shares to be
vested in 8 quarters as of December, 2008 each quarter 3,897 shares. The exercise price per each Ordinary share is $0.72 per share. The options
were converted into 31,177 options for 31,177 co mmon shares of our co mpany under our 2009 Share Incentive Plan with the exerc ise price of
$0.72 for each co mmon share, and the same vesting period.

Rami Treger- Director

Mr. Treger is entit led to options under the Co mpany's 2009 Share Incentive Plan in the total amount of 31,177 options for 31,177 co mmon
shares to be vested in 8 quarters as of July 1, 2009, each quarter 3,897 co mmon shares. The exercise price per each Ordinary share is $1.37 per
common share.


                                                                      38
Business Advisory B oard

The Business Advisory Board is co mposed of two select individuals who have significant business expert ise that the company re lies on.
Professor Avi Nachmias is a leading figure in the global potato industry. He served as advisor to Nestle, MacDonald's, and Marks & Spencer,
and to leading potato processing companies in South A merica and South Africa. Prior he was Chief Deputy of the Vulcan i Resear ch Center of
Israel's Ministry of Agriculture.

Professor Ilan Chet is a prominent, leading microbio logy scientist. Prof. Chet served as President of the Weizmann Institute of Science
(2002-2006). Pro f. Chet earned numerous high-level awards and honors for his research. In 2001, his research on extensive control of plant
diseases using environment-friendly microorganisms, earned him a no mination for the Nobel Prize. He is a professor at the Hebrew University
of Jerusalem.

                                                                                           Change in
                                                                                         Pension Value
                           Fees                                                               and
                         Earned                                      Non-Equity           Nonqualified
                         or Paid        Stock       Option          Incentive Plan         Deferred              All Other
   Name                  in Cash       Awards       Awards          Co mpensation        Co mpensation         Co mpensation        Total
    (1)          Year       ($)          ($)         ($)(1)              ($)               Earnings                 ($)             ($)
Avi
Nach mias
(2)             2008        36,116              -          475                       -                    -                    -       36,591

Ilan Chet
(3)             2008                                       713                       -                    -                    -            713


   (1)      For the assumptions made in the valuation of the options, see the table in "Directors Co mpensation".
   (2)      Prof. Nach mias was granted 31,177 options for 31,177 Co mmon stock shares to be vested in 8 quarters, each quarter 3,897 o ptio ns,
            commencing on December 1, 2008.
   (3)      Prof. Chet was granted 93,532 options for 93,532 Co mmon Stock shares to be vested in 16 quarters, each quarter 5,846
            options commencing on December 1, 2008.

Prof. Avi Nachmias- Member of the Advisory Board

On January 9, 2008 Pimi Israel signed a Consulting Agreement with the Center for Potato Research in a Warm Climate Lt d (the " Center")
which is controlled by Prof. Avi Nach mias, who is a member of our advisory board. Under the Consulting Agreement, Pimi Israel is obligated
to pay a consulting fee in an amount of 10,000 NIS ($2,387) a month plus VAT against a tax invoice to the Center. F ollowing a capital raise by
the Company, the monthly consultancy fee shall be 12,000 NIS ($2,865) a month. The consultancy period is for three years as o f January 1 st
2008 and may be extended.

Prof. Nachmias received options under Pimi Israel’s 2008 ESOP under an option agreement dated January 22, 2009. Pimi h as granted Prof.
Nach mias a total amount of 31,177 shares to be vested over a period of 8 quarters, each quarter 3,897 shares, provided he is engaged as a Pimi
consultant, as of December 1, 2008, for a period of 8 quarters. The exercise price per each co mmon share is $ 0.72 per share.

Prof. ILa n Chet - Member of the Advisory Board

On January 10, 2009, Prof. Chet received Options under Pimi Israel’s 2008 ESOP. Pimi granted to Prof. Chet a total of 93,532 options of
common stock to be vested for a period of 16 quarters, each quarter 5,846 options for shares, provided he is engaged as Pimi consultant, as of
December 1, 2008, for a period of 16 quarters. The exercise price per each ordinary share is $0.72 per share.

                                                                        39
                                    CERTAIN RELATIONS HIPS AND RELATED TRANSACTIONS

Sharehol der Agreement



Our shareholders Alon Carmel ("Carmel "), Omdan Consulting and Instructions Ltd. A co mpany under the control of Advocate Eita n Sh mueli
and his wife M rs. Vivy Sh mueli ( " Omdan " ), Nir Eco logy Ltd. ( " Nir") a co mpany under the control of M r. Nimord Ben Yehuda our CTO,
by Ashdor Asset Management and Trust Ltd. (that held the shares in trust for Nir) (collectively the "Shareholders"), entered into an agreement
on February 24, 2009 (the "Shareholders Agreement ") . Nir is a company under the control of our director, Mr. Nimrod Ben -Yehuda. Under
the Shareholders Agreement, the Shareholders have agreed to vote their shares in the annual general meeting of the shareholde rs. Omdan and
Nir will vote for 2 directors which will be proposed by Mr. Carmel. Mr. Carme l and Nir will vote for one director which will be proposed by
Omdan, and M r. Carmel and Omdan will vote for one director which will be p roposed by Nir. The parties agreed that in case Mr. Carmel will
hold less than 15% and more than 7.5% of Pimi's share capital, Omdan and Nir shall vote for only one director which will be proposed by Mr.
Carmel. In case the holdings of one of the parties will be less than 7.5% of Pimi's share capital, the other two parties will no t be obligated to
vote for the director proposed by this party. In case, the number of directors appointed by the parties will be more than 4 directors, the parties
will appoint an even number of directors. In case, six directors will be appointed, Mr. Carmel will propose the fifth directo r and Omdan and Nir
will vote for him, Nir will propose the sixth director and Mr. Carmel and Omdan will vote for him. In case eight directors will be appointed,
Mr. Carmel will propose the seventh director and Omdan and Nir will vote for such director. Omdan will propose the eighth director and Mr.
Carmel and Nir will vote for him. In case there will not be unanimous consent between the above shareholders with regard to t he identity of an
outside director, the shareholders will vote against the appointment of such external director in any general meeting it is brought for election.

In an addendum to the Shareholders Agreement dated April 23, 2009, Nir and Omdan agreed that in case of liquidation of the Co mpany or a
sale of the majority of its shares to an investor (collectively, the “Sale”) under which Carmel will receive less than $965,000 from such event,
they will pay to Carmel, out of the sum they have received under the Sale the balance up to $965,000.

Relati onshi p with Sharehol ders

On July 12, 2004 Nir, and Machteshim Chemical Works Ltd. ("Machteshim") entered into an agreement (the "Assignment Agreement" ), under
which Machteshim transferred to Pimi Israel all of their rights in the knowledge and/or information relating to the produc t known as MC-10,
which is the previous name of Pimi's product SpuDefender ™ (the "Product"). In addition, Machteshim has transferred to Pimi Israel all the
rights in the patents and/or patents requests and/or licenses and/or documents related to the Produc t. Under the Assignment Agreement,
Machteshim agreed to reg ister, on its own account, all the rights in the patent and/or patent requests, relating to the produ ct, in the countries
nominated in an appendix to Assignment Agreement. If Machteshim shall not register the patents, it was agreed that Machteshim will transfer
all the required documents to Nir, or any party on its behalf, and Nir, or any party on its behalf, shall carry out the regis tration. Under an
agreement dated, November 11, 2005 between Nir and Pimi, Nir has declared and confirmed that the know -how and patents and patent
application and/or licenses relating to the Product wh ich was transferred to Pimi Israel fro m Machteshim under the Assignment Agreement (the
"Intellectual Property") belongs exclusively to Pimi Israel except for the right of use of the Intellectual Property for water treat ment
applications which was granted irrevocably and exclusively on a world -wide basis to Nir or to Nimrod Ben Yehuda or to Naava Ben -Yehuda
(or any company in which Nimrod or Naava Ben Yehuda have interest). Nir has obligated to sign on all necessary documents for the
complet ion of the assignment of the Intellectual Property to Pimi.

Nir is the agent for the State of Israel of raw materials utilized by Pimi Is rael in the formulat ion of its products. During the development stage
of our formu lation, Pimi Israel imported to Israel the raw material in order to formu late its products. Under an ag reement da ted November 11,
2005, Pimi purchased from Nir such raw materials at costs plus 10% handling co mmission. Under this agreement, Pimi Israel has paid to Nir as
handling commission in the sums of $1,699, and $1,461 in the years 2006, and 2007 respectively. Currently Pimi Israel does no t produce the
formulat ion in Israe l, and it is not expected that Pimi Israel will purchase this raw material fro m Nir in the future.

On November 13, 2005 an Investment Agreement was entered into between Nimrod Ben -Yehuda, Omdan, Mr. Carmel and JNS Capital LLC
("JNS") (the "Investment Agreement"). Under the Investment Agreement, Mr. Carmel and JNS agreed to invest in Pimi Israel a total sum of
$900,000 ("Investment A mount"), in quarterly installments, in consideration for the issuance of 120,000 shares. On November 1 5, 2006 an
Addendum to the Investment Agreement was signed by the above parties (the "Addendum"). Until that time, M r. Carmel and JNS have
invested in Pimi Israel the total sum of $785,000 out of their total Investment Amount. Under the Addendum JNS was released f ro m its
obligation to invest in Pimi Israel the balance of the Investment A mount and Mr. Carmel agreed to pay to Pimi an addit ional s um of $2 15,000
out of which $115,000 is the balance of the Investment A mount and $100,000 is an "Additional Investment." It was further agr eed that Mr.
Carmel and JNS will be entit led, against the payment of the balance of the Investment A mount, to receive 120,000 preferred sh ares of 0.01 NIS
each of Pimi Israel instead of 120,000 Ordinary Shares of 0.01 NIS each. Pimi Israel has issued prefe rred shares to Mr. Carmel and JNS,
respectively, to their investments in Pimi Israel. M r. Carmel has transferred the Additional Investment amount to Pimi Israel in accordance with
the Addendum and Pimi has issued to Mr. Carmel 30,006 p referred shares.
In December 2006 Omdan issued to Pimi Israel a loan in the amount of 70,000 NIS ($16,413), wh ich was converted on January 2007 i nto
common shares of Pimi Israel. The loan did not bear any interest.

Mr. Eitan Sh mueli (the controlling shareholder of Omdan) and Mr. Nimrod Ben Yehuda, have guaranteed to Bank Hapoalim a line of cred it of
60,000 NIS ($ 14,327) granted to Pimi Israel.

                                                                   40
On April 1, 2005, Mr. Nimrod Ben Yehuda guaranteed on behalf o f Pimi Israel, certain obligations of Pimi Israel under a lease agreement
dated April 1, 2005 for Pimi Israel’s offices with Kibbutz Alonim.

On December 12, 2007, Mr. Carmel has guaranteed to Bank Leu mi a line of cred it of 57,000 NIS ($ 13,610) granted to Pimi Israel.

Nir and Pimi Israel share the same office space in Kibbutz Alonim, Israel. The office space was rented together by Pimi Israe l and Nir fro m
Kibutz Alonim by two separate lease agreement. Nir has supplied to Pimi office serv ices and paid insurance premiu ms for t he offices. Pimi
Israel has paid Nir for this service and expenses (including IT, insurance, maintenance, office equip ment and supplies) the s um of $3,498,
$6,031 in years 2006 and 2007 respectively. As of 2009, Pimi Israel subleased to Nir 10 square meters of office space, for $75 per month. As of
the date of the filing of this registration statement, Nir no longer supplies these services to Pimi.

During the years 2006-2008, Nir has been engaged in treatment of our patents and IP and has incurred expenses related to such services. We
have agreed to pay to Nir for these services and in reimbursement of the expenses incurred by it a sum of $ 23,878 (100,000 N IS). Until June
2009 we have paid to Nir the balance of the debt.

Share Exchange Agreement

On April 27, 2009, we entered into an Exchange Agreement with Pimi Israel and all of the shareholders of Pimi Israel, pursuan t to which we
agreed to acquire all of the issued and outstanding shares of Pimi Israel. As consideration for the acquisition of the shares of Pimi Israel, we
agreed to issue an equal number of shares of our Common Stock to the Shareholders of Pimi Israel. As a result of the Exchange Agreement,
Pimi Israel became a who lly-o wned subsidiary of the Co mpany.

Relati onshi p with directors and Officers

Youval Slay-CEO

Pimi entered into an Employ ment Agreement on November 27th, 2006 with Mr. Saly. On October 29, 2008, the part ies entered into an
Addendum to the Employ ment Agreement. Mr. Saly is entitled to total compensation of 50,000 NIS ($11,939) plus VAT per month f ro m the
month of October 2008. This consideration is paid against VAT receipt and covers all social benefits, car maintenance and cellular phone
expenses of Mr. Saly. Mr. Saly has taken upon himself the pay ment for the social security, the pension fund and a ny other social insurance and
benefits. Pimi has paid Mr. Saly the total sum o f 437,400 NIS ($119,715) in 2008, and 150,000 NIS ($36,989) in the three mo nt h period ended
March 31, 2009, as a consideration under his emp loyment agreement. M r. Saly's position is considered full t ime emp loy ment.

In addition M r. Saly is entitled to options under the ESOP of Pimi Israel fo r 2008 in the total amount of 311,773 options for 311,773 Ord inary
shares to be vested in 16 quarters starting as of December 2007, each quart er 19,486 shares . The exercise price per each Ordin ary share is 0.01
NIS. The options were converted into 311,773 options for 311,773 co mmon stock shares of our company with an exercise price of $ 0.01 for
each option share and the same vesting period.

Nimrod Ben Yehuda - CTO

According to an agreement dated November 13, 2005, as amended on November 16, 2006, and of April 28, 2009, M r. Ben Yehuda has been
appointed as Pimi's CTO. M r. Ben Yehuda is entitled to a monthly gross salary of 25,000 NIS ($5,969), p lus benefits such as e xecutive
insurance, education fund at the rate of 10 % (7.5% contribution by us), and d isability insurance. Furthermo re, Mr. Ben Yehud a is entit led to a
credit card for approved expenses, including traveling expenses, a fully paid rental car (including taxes assessed for private use) and a mobile
phone which will be fu lly covered by the Co mpany.

Under the addendum of November 16, 2006, Mr. Ben Yehuda’s net salary was reduced by the sum of 3,000 NIS ($789). Th e reduction was
considered as a loan by Mr. Ben Yehuda to us. We undertook to pay this loan to Mr. Ben Yehuda after a new investment of not less than
$500,000 at a valuation of not less than $3,000,000, or in case of another event causing Pimi to receive an inco me of more th an $500,000. Pimi
Israel has paid to Mr. Ben Yehuda the debt accrued for the reduced salary on December 2008. M r. Ben Yehuda's position is considered full
time employ ment. Mr. Ben Yehuda has received the sum of $103,698, $121,701 and $132,515 as salary and social benefits in the years 2006,
2007 and 2008 respectively.

Pimi has paid Mr. Ben Yehuda the total sum of 455,860 NIS ($119,900) in 2008 and a total sum of 114,818 NIS ($28,313) in the first quarter
of 2009.

Avi Lifshitz- CF O
Pimi has entered into a Personal Service Agreement in November 2008 with accountant Avi Lifshitz. Mr. Lifshitz and Ad wise Ltd., a co mpany
under the control of Mr. Lifshitz ("Ad wise"), are entit led to a total consideration of 10,000 NIS ($2,388) plus VAT per mont h as fro m October
2008. Until the date of wh ich Pimi raises capital fro m an external investors for a sum exceed ing $1,000,000, Pimi shall pay Mr. Lifshitz and Ad
wise, on behalf of the consideration, a sum of 5,000 NIS ($1,194) plus VAT, and the balance of the consideration shall accru e to the credit of
the Mr. Lifshitz and Ad wise and shall be paid to them after the raising of cap ital as aforesaid. The consideration to Mr. Li fshitz will is paid as
salary and the consideration to Ad wise is paid against VAT receipt, the consideration shall not excee d the amount of 10,000 NIS plus VAT.
The consideration covers taxes, national insurance, pension fund and/or any other social insurance and/or benefits, car maint enance and cellular
phone expense. Pimi expenses amounted to the total sum o f 30,000 NIS ($7,8 91) in 2008 and total sum o f 30,000 NIS ($7,398) in three month
period ended March 31, 2009 under this Personal Serv ice Agreement.

In addition Mr. Lifshit z is entitled to options under the ESOP for Israel for 2008 in the total amount of 62,355 options for 62,355 Ord inary
shares to be vested in 16 quarters as of October, 2008 each quarter 3,897 shares. The exercise price per each Ordinary share is $0.72 per share.
The options were converted into 62,355 options for 62,355 co mmon shares of our company with th e exercise price of $0.72 for each common
share, and the same vesting period.

Doron Shorrer- Director

Mr. Shorrer is entitled to options under the ESOP for Israel for 2008 in the total amount of 31,177 options for 31,177 Ordin a ry shares to be
vested in 8 quarters as of December, 2008 each quarter 3,897 shares. The exercise price per each Ordinary share is $0.72 per share. The options
were converted into 31,177 options for 31,177 co mmon shares of our co mpany with the exercise price of $0.72 for each commo n share, and the
same vesting period.

Rami Treger- Director

Mr. Treger is entitled to options under the Company's 2009 Option Incentive Plan in the total amount of 31,177 options for 31 ,177 co mmon
shares to be vested in 8 quarters as of July, 2009 each quarter 3,897 co mmon shares. The exercise price per each is $1.37 per common share.

Director Independence

Our Board of Directors has determined that Doron Shorrer and Rami Treger are “independent” directors. Although Pimi curren tly is not a listed
company on any stock exchange, our Board of Directors uses the AMEX co mpany rules as a guideline in its determination of director
independence. Under those rules, no director would qualify as independent unless our Board of Directors affirmat ively determines that the
director does not have a relationship that would interfere with the exercise of independent judgment in carrying out the resp onsibilities of a
director. Specifically, no director would qualify as independent if (a) during the past three years, the di rector or family member was employed
by the Company, (b) the director accepted or has an immed iate family member who accepted any compensation from the Co mp any in excess of
$120,000 during any period of twelve consecutive months within the three preceding years, or (c) the director is, or has an immediate family
member who is, a current partner of the Co mpany's outside auditor, or was a partner or emp loyee of the Co mpany's outside auditor who worked
on the Company's audit at any time during any of the past three years.

Legal Services

Sadot & Co. Law offices in wh ich Mr. Eitan Shmueli (a controlling shareholder of Omdan, one of our major shareholders), is a partner, has a
retainer ag reement with Pimi and has received fee fro m Pimi during the last 3 years, as legal fees 30,000 NIS ($7,398), 74,859 NIS ($16,7 98),
121,188NIS ($29,500), and 91,142 NIS ($24,731) in the three month period ended March 31, 2009 and in the years 2006, 2007 and 2008
respectively.

                                                                         41
                       SECURITY OWNERS HIP OF CERTAIN B EN EFICIAL OWNERS AND MANAGEMENT

The following table sets forth the number of and percent of the Co mpany's common stock beneficially owned by:

           all directors and nominees, naming them,
           our executive officers,
           our directors and executive officers as a group, without naming them, and
           persons or groups known by us to own beneficially 5% or more of our Co mmon Stock or our Preferred Stock having voting rig hts:

The percentages in the table have been calculated on the basis of treating as outstanding for a particular person, all shares of our capital stock
outstanding on June 30, 2009, and all shares of our common stock issuable to that person in the event of the exercise of outstanding options and
other derivative securities owned by that person which are exercisable within 60 days of June 30, 2009. Except as otherwise indicated, the
persons listed below have sole voting and investment power with respect to all shares of our capital stock owned by them.

                                                                                                 Nu mber of Shares         Percentage of Class
     Name and address of owner               Title of Class        Capacity with Co mpany       Beneficially Owned (1)              (2)


Alon Carmel (3)
c/o Pimi Agro CleanTech, Inc.               Co mmon Stock          Chairman of the Board              2,433,314                  36.27%
Kibutz Alonim, PO Bo x 117, Hut zot
Alonim 30049
Israel

Youval Saly
c/o Pimi Agro CleanTech, Inc.               Co mmon Stock          Chief Executive Officer            116,916 (4)                 1.74%
Kibutz Alonim, PO Bo x 117, Hut zot
Alonim 30049
Israel

Avi Lifshitz
c/o Pimi Agro CleanTech, Inc.               Co mmon Stock          Chief Financial Officer             11,691 (5)                 0.17%
Kibutz Alonim, PO Bo x 117, Hut zot
Alonim 30049
Israel

Nimrod Ben-Yehuda (3)(6)
c/o Pimi Agro CleanTech, Inc.               Co mmon Stock             Chief Technology                1,440,100                  21.47%
Kibutz Alonim, PO Bo x 117, Hut zot                                    Officer, Director
Alonim 30049
Israel

Avi Nach mias (7)
c/o Pimi Agro CleanTech, Inc.               Co mmon Stock         Chief Research Officer,               7,794                     0.12%
Kibutz Alonim, PO Bo x 117, Hut zot                               Advisory Board Member
Alonim 30049
Israel

Doron Shorrer                                                                                           27,009
c/o Pimi Agro CleanTech, Inc.               Co mmon Stock                   Director                                              0.41%
Kibutz Alonim, PO Bo x 117, Hut zot
Alonim 30049
Israel

Ilan Chet
c/o Pimi Agro CleanTech, Inc.               Co mmon Stock                 Advisory                    11,692 (10)                 0.17%
Kibutz Alonim, PO Bo x 117, Hut zot                                     Board Member
Alonim 30049
Israel

                                                                       42
Omdan Consulting and Instruction               Co mmon Stock                  Shareholder                    817,362                    12.18%
Ltd (3)(11)
44 Nachal A mud St.
Ramat-Hasharon, Israel, 47204

All Officers and
Directors As a Group                          Co mmon Stock                                            4,873,672                 72.64%
(7 persons)
(1) This colu mn represents the total number of votes each named stockholder is entitled to vote upon matters presented to the sha reholders for
a vote.
(2) Applicable percentage ownership is based on 6,398,917 shares of Co mmon Stock outstanding as of June 30, 2009, together with
securities exercisable or convertible into shares of Co mmon Stock within 60 days of June 30, 2009, for each stockholder. Bene ficial ownership
is determined in accordance with the rules of the Securities and Exchange Co mmission and g enerally includes voting or investment power with
respect to securities. Shares of Co mmon Stock that are currently exercisable or exercisable within 60 days of April 30, 2009, are deemed to be
beneficially owned by the person holding such securities for th e purpose of co mputing the percentage of ownership of such person, but are not
treated as outstanding for the purpose of computing the percentage ownership of any other person.
(3) Fo r the terms of Vot ing Agreement between Alon Carmel, Nir Ecology and Omdan Consulting and Instruction Ltd see Certain
Relationship and Related Transactions.
(4) This number represents the amount of options which become vested under Mr. Saly option agreement until August 30, 2009.
(5) This number represents the amount of options which become vested under Mr. Lifshit z option agreement until August 30, 2009.
(6) The shares are owned by Nir Ecology Ltd, a co mpany under the control of Mr. Ben Yehuda and are held in trust for Nir Eco logy by a
trustee.
(7) This number represents the amount of options which become vested under Prof. Nach mias option agreement until August 30, 2009.
(8) 19,215 shares of Co mmon Stock are owned by Shorrer International Ltd, a co mpany under the control of M r. Doron Shorrer. And the
balance of 7,794 shares of Common Stock represents the amount of options which become vested under Mr. Shorrer ’s option agreement until
August 30, 2009.
(10) Th is number represents the amount of options which become vested under Prof. Chet option ag reement until August 30, 2009.
(11) A co mpany owned by Mr. Eitan Sh mueli and his wife Mrs. Vivy Sh mueli. M r. Sh mueli was the Co -Founder of Pimi and serves as
Pimi’s legal Advisor in Israel. The shares owned by Omdan are held by a trustee.

                                                        DES CRIPTION OF S ECURITIES

The following description as a summary of the material terms of the provisions of our Articles of Incorporation and Bylaws. T he Articles of
Incorporation and Bylaws have been filed as exhibits to the registration statement of which this prospectus is a part.

Common Stock

We are authorized to issue 30,000,000 shares of common stock with $.01 par value per share. As of June 30, 2009, there were 6,398,917
shares of common stock issued and outstanding held by 39 shareholders of record.

Each share of co mmon stock entitles the holder to one vote, either in person or by pro xy, at meetings of shareholders. The ho lders are not
permitted to vote their shares cumulat ively. Accordingly, the shareholders of our co mmon stock who hold, in the aggregate, more than fifty
percent of the total voting rights can elect all of our d irectors and, in such event, the holders of the remaining minority s hares will not be able to
elect any of such directors. The vote of the holders of a majority of the issued and outstanding shares of common stock entit led to vote thereon
is sufficient to authorize, affirm, rat ify or consent to such act or action, except as otherwise provided by law.

Holders of co mmon stock are entit led to receive ratably such dividends, if any, as may be declared by the Board of Direct ors out of funds
legally available. We have not paid any d ividends since our inception, and we presently anticipate that all earnings, if any, will be retained for
development of our business. Any future disposition of d ividends will be at the discretion of our Board of Directors and will de pend upon,
among other things, our future earnings, operating and financial condition, capital requirements, and other factors.

Holders of our co mmon stock have no preemptive rights or other subscription rights, conversion rights, redemption or sin king fu nd provisions.
Upon our liquidation, dissolution or winding up, the holders of our co mmon stock will be entitled to share ratably in the n et assets legally
available fo r d istribution to shareholders after the pay ment of all of our debts and other liabilit ies. There are not any pro visions in our Articles
of Incorporation or our Bylaws that would prevent or delay change in our control.



Transfer Agent and Registrar
The transfer agent and registrar for our co mmon stock is Action Stock Transfer Corporation.

                                                                      43
                                                        SELLING SHAREHOLDERS

The selling shareholders named below are selling the securities. The table assumes that all of the securities will be sold in this offering.
However, any or all of the securities listed below may be retained by any of the selling shareholders, and therefore, no accurate forecast can be
made as to the nu mber of securities that will be held by the selling shareholders upon termination of this offering. The sell ing shareholders will
offer their shares at $1.35 per share until the Company’s shares are quoted on the OTC Bulletin Board and, assuming this occurs, thereafter at
prevailing market prices or privately negotiated prices. We will not receive proceeds from the sale of sha res from the selling shareholders.
These selling shareholders acquired their shares by purchase in a single private placement exempt fro m registration under sec tion 4(2) o f the
Securities Act of 1933. We believe that the selling shareholders listed in the table have sole voting and investment powers with respect to the
securities indicated unless otherwise stated in the footnotes below. We will not receive any proceeds from the sale of the se curities by the
selling shareholders. No selling shareholders are broker-dealers or affiliates of broker-dealers.

                                                                                                                               Percentage of
                          Shares of Co mmon                           Percentage of                                           Co mmon Stock
                           Stock Included in Beneficial Ownership Co mmon Stock Before           Beneficial Ownership       Owned After Offering
       Stockholder           Prospectus (i)   Before Offering (ii)    Offering (ii)              After the Offering (iii)           (iii)
eNit iatives – New
Business Architects               11,578                   55,664                  0.83%                       44,086                   0.66%
Ltd. (iv)(xii)
Erez Ravina(xii)                  29,062                 139,719                   2.08%                      110,657                   1.65%
Ahiam Lifshitz(xii)               16,000                  76,922                   1.15%                       60,922                   0.91%
Shorer International
                                    3,997                  19,215                  0.29%                       15,218                   0.23%
Ltd. (v)(xii)
Yechiel Kat z(xii)                11,546                  55,508                   0.83%                       43,962                   0.66%
Michael Gildengorin               22,604                  70,139                   1.05%                       47,535                   0.71%
Efi nave(xii)                      7,532                  36,213                   0.54%                       28,681                   0.43%
Dany Birger(xii)                   9,052                  43,518                   0.65%                       34,466                   0.51%
Lior Yaron                        47,362                 146,965                   2.19%                       99,603                   1.48%
Asaf David
                                    3,000                  14,423                  0.21%                       11,423                   0.17%
Margalit(xii)
Shai Scharfstein(xii)               5,934                  28,527                  0.43%                       22,593                   0.34%
Shai Sap ir Investments
                                  43,019                 206,820                   3.08%                      163,801                   2.44%
Ltd. (vi)(xii)
Galit Szo lo mowicz                 9,194                  28,528                  0.43%                       19,334                   0.29%
Jacques Beraru
                                      285                   1,371                  0.02%                         1,086                  0.02%
(xi)(xii)
Shay Zilberman(xii)                    74                     354                  0.01%                           280                 0.004%
Zeev Vider (xi)(xii)                   33                     161                  0.00%                           128                 0.002%
Arieh Zinger
                                       80                     384                  0.01%                           304                 0.005%
Zamir(xii)
Moshe Mazor(xii)                    1,483                   7,132                  0.11%                         5,649                  0.08%
Hagai Halevy(xii)                   1,426                   6,855                  0.10%                         5,429                  0.08%
Reuven Radu
                                      285                   1,371                  0.02%                         1,086                   0.2%
Gutt mann(xii)
Alon Galanti(xii)                     549                   2,641                  0.04%                         2,092                  0.03%
Ephraim David(xii)                     80                     383                  0.01%                           303                 0.005%
Dalya Zelikovich
                                    2,279                  10,958                  0.16%                         8,679                  0.13%
(x)(xii)
Shiran Zelikovich
                                      570                   2,740                  0.04%                         2,170                  0.03%
(x)(xii)
Dan Geiger                           442                   1,370                   0.02%                          928                  0.014%
Meir Avraham Duke                 88,292                 273,972                   4.08%                      185,680                   2.77%
B.M.O. Lavi
Investments and
                                  29,193                 140,351                   2.09%                      111,158                   1.66%
Holdings 2008 Ltd.
(vii)(xii)
Oded Feig in(xii)                 13,867                  66,667                   0.99%                       52,800                   0.79%
Oran Agranat(xii)                 20,800                 100,000                   1.49%                       79,200                   1.18%
EarthBound LLC (viii)             14,608                 236,641                   3.53%                      222,033                   3.31%
Faina Kronenberg                   2,429                   7,536                   0.11%                        5,107                   0.08%
Edward Britt                       1,216                   3,773                   0.06%                        2,557                   0.04%
Brockman
William Yarmuth                   6,079                 18,863                  0.28%                      12,784                  0.19%
H.H. Investment
                                  1,756                  8,442                  0.13%                       6,686                  0.10%
Co mpany (ix)(xii)

    Total                       405,703              1,814,126                27.04%                    1,408,423                20.99%


(i) These columns represent the aggregate maximu m nu mber and percentage of shares that the selling stockholders can own at on e time (and
therefore, offer for resale at any one time).
(ii) The number and percentage of shares beneficially owned is determined in accordance with Rule 13d -3 of the Securit ies Exchange Act of
1934, and the informat ion is not necessarily indicative of beneficial ownership for any other purpose. Under such rule , beneficial ownership
includes any shares as to which the selling stockholders has sole or shared voting power or investment power and also any sha res, which the
selling stockholders has the right to acquire within 60 days. The percentage of shares owned by each selling stockholder is based on 6,708,583
shares issued and outstanding as of June 30, 2009, including options exercisable within 60 days of June 30, 2009.
(iii) Assumes that all securities registered will be sold.
(iv) eNitiatives is a co mpany under the control of Mr. Reuven Marko.
(v) Shorrer International Ltd. is a company under the control of Mr. Doron Shorrer. M r. Shorrer is a member of our board of Directors.
(vi) Shai Sapir Investments Ltd. is a co mpany under the control of Mr. Yehoshua Hershkovitz.
(vii) B.M.O. Lavi Investments and Holdings 2008 Ltd. is a co mpany under the control of Mr. Boaz Lavie. On April 2009 B.M .O. r eceived fro m
Pimi Israel the sum of 44,990 NIS ($10,743) for business and financial consulting.
(viii) Earthbound is a company under the control of Mr. Jack Dweck and 3 Sixty Inc a company whose sole shareholder is JACohe n FLP
(Family Limited Partnership), a corporation organized under the laws of the State of Delaware. The General Partners of th e JACohen FLP are
Jeffrey Cohen and Adele Cohen. For a warrant to purchase 145,985 shares of Co mmon Stock granted to Earthbound LLC on May 3, 2 009, see
Investment Agreement with Earthbound LLC. To the Co mpany best knowledge, Earthbound is the mother co mpan y of Vegiesafe LLC with
which the Co mpany has a joint venture (see "Customers and Partners").
(ix) H.H. Investment Co mpany is a co mpany under the control of the attorneys Amos Hachmun and Dor Heskia. M r. Hach mu n held a decision
share of 0.01 NIS no minal value, in Pimi Israel, which gave him decisive vote in case of dispute between the directors of Pimi Israel. On
February 2009 this share was converted into one ordinary share of 0.01 NIS nominal value of Pimi Israel which was later co nve rted into one
Co mmon Stock share of our company. Mr. Hach mon received legal fees for his services to Pimi Israel in the sum of 21,759 NIS ($5,149) and
16,266 NIS ($3,382) in the years 2009, 2007, respectively.
(x) Dalya and Shiran Zelikovich are mother and daughter.
(xi) Jacque Beraru and Zeev Vider are brothers -in-law.
(xii) An Israeli resident. The shares owned by this shareholder are held in trust by a trustee.



                                                                     44
                                                           PLAN OF DIS TRIB UTION



          The selling stockholders and any of their pledgees, donees, assignees and successors -in-interest may, fro m t ime to time, sell an y or all
of their shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions or by
gift. These sales may be made at fixed or negotiated prices. The selling stockholders cannot predict the extent to which a ma rket will develop
or, if a market develops, what the price of our co mmon stock will be because there is no trad ing market in our co mmon stock as of the date of
this prospectus. The selling stockholders will sell shares an estimated of $1.35 per share until a public market develops for the co mmon stock.
In order for a public market to develop, a broker-dealer must make a filing with the FINRA, which oversees the over-the-counter market,
including the OTC Bulletin Board. If a public market develops for the co mmon stock, the selling stockholders may sell their s hares of co mmon
stock in the public market based on the market p rice at the time of sale or at negotiated prices. Subject to the foreg oing, the selling
stockholders may use any one or more of the following methods when selling or otherwise transferring shares:

• ordinary brokerage transactions and transactions in which the broker-dealer solicits the purchaser;
• block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal
• facilitate the transaction;
• purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
• an exchange distribution in accordance with the rules of the applicable exchange;
• privately-negotiated transactions;
• broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;
• through the writ ing of options on the shares;
• a co mb ination of any such methods of sale; and
• any other method permitted pursuant to applicable law.

The selling stockholders may also sell shares under Rule 144 of the Securit ies Act, if available, rather than under this pros pectus. The selling
stockholders shall have the sole and absolute discretion not to accept any purchase offer or make any sale of shares if it deems the purchase
price to be unsatisfactory at any particular time.

The selling stockholders or their respective pledgees, donees, transferees or other successors in interest, may also sell the s hares directly to
market makers acting as principals and/or broker-dealers acting as agents for themselves or their customers. Such broker -dealers may receive
compensation in the form of discounts, concessions or commissions fro m the sellin g stockholders and/or the purchasers of shares for who m
such broker-dealers may act as agents or to whom they sell as principal or both, which compensation as to a particular broker -dealer might be
in excess of customary commissions. Market makers and block purchasers purchasing the shares will do so for their own account and at their
own risk. It is possible that a selling stockholder will attempt to sell shares of common stock in block transactions to market makers or other
purchasers at a price per share which may be belo w the then existing market price. We cannot assure that all or any of the shares offered in this
prospectus will be issued to, or sold by, the selling stockholders. The selling stockholders and any brokers, dealers or agen ts, upon effecting the
sale of any of the shares offered in this prospectus, may be deemed to be "underwriters" as that term is defined under the Se curities Exchange
Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the rules and regulations of such acts. In such event, any
commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be
underwrit ing commissions or discounts under the Securities Act.

We are required to pay all fees and expenses incident to the registration of the shares, including fees and disbursements of counsel to the selling
stockholders, but excluding brokerage co mmissions or underwriter discounts.

The selling stockholders, alternatively, may sell all or any part of the shares offered in this prospectus through an underwriter. The selling
stockholders have not entered into any agreement with a prospective underwriter and there is no assurance that any such agree ment will be
entered into.

The selling stockholders may pledge their shares to their brokers under the margin provisions of customer agreements. If a se lling stockholder
defaults on a marg in loan, the bro ker may, fro m t ime to time, o ffer and sell the p ledged shares. The selling stockholders and any other persons
participating in the sale o r d istribution of the shares will be subject to applicable provisions of the Securities Exchange A ct of 1934, as
amended, and the rules and regulations under such Act, including, without limitation, Regulation M. These provisions may restrict certain
activities of, and limit the timing of purchases and sales of any of the shares by, the selling stockholders or any other suc h person. In the event
that any of the selling stockholders are deemed an affiliated purchaser or distribution part icipant within the meaning of Regulation M, then the
selling stockholders will not be permitted to engage in short sales of common stock. Furthermore, under Regulation M , pers ons engaged in a
distribution of securities are proh ibited fro m simultaneously engaging in market making and certain other activit ies with res pect to such
securities for a specified period of t ime prio r to the co mmencement of such distributions, subject to specified exceptions or exempt ions. In
addition, if a short sale is deemed to be a stabilizing activ ity, then the selling stockholders will not be permitted to enga ge in a short sale of our
common stock. All of these limitations may affect the marketability of the shares.
If a selling stockholder notifies us that it has a material arrangement with a bro ker -dealer for the resale o f the common stock, then we would be
required to amend the registration statement of which this prospectus is a part, and file a prospectus supplement to describe the agreements
between the selling stockholder and the broker-dealer.

                                                                         45
PENNY S TOCK

The Securities and Exchange Co mmission has adopted Rule 15g-9 wh ich establishes the definition o f a "penny stock," for the purposes
relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share,
subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:

              that a broker or dealer approve a person's account for transactions in penny stocks; and
              the broker or dealer receive fro m the investor a written agreement to the transaction, setting forth the identity and quantit y of the
              penny stock to be purchased.

In order to approve a person's account for transactions in penny stocks, the broker or dealer must:

              obtain financial info rmation and investment experience objectives of the person; and
              make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient
              knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prio r to any transaction in a penny stock, a disclosure schedule prescribed by the Commissio n relating
to the penny stock market, which, in h ighlight form:

              sets forth the basis on which the broker or dealer made the suitability determination; and
              that the broker or dealer received a signed, written agreement fro m the investor prior to the transaction.

Generally, brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficu lt
for investors to dispose of our common stock and cause a decline in the market value of our stock.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the
commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and
remedies availab le to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent
price informat ion for the penny stock held in the account and information on the limited ma rket in penny stocks.

                          MARKET FOR COMMON EQUIT Y AND RELATED S TOCKHOLDER MATTERS

OTC B ulletin Board Consi derations

As discussed elsewhere in this registration statement, the Co mpany ’s common stock is not currently included for annotation on the Over the
Counter Bulletin Board (“OTCBB”), and there is no public trading market. To be quoted on the OTCBB, a market maker must file an
application on our behalf in order to make a market for our co mmon stock. We have engaged in preliminary dis cussions with an FINRA
Market Maker to file our application on Form 211 with the FINRA, but as of the date of this prospectus, no filing has been ma de.

As of June 30, 2009, there are currently 874,339 shares of our co mmon stock subject to outstanding options or warrants to pur chase, or
securities convertible into, common equity of Pimi.

The Co mpany is not obligated to register any shares under the Securities Act for sale by security holders, although the registrant is hereby filing
this registration statement for the registration of 405,703 shares of Co mmon Stock on behalf of the selling stockholders.

Equi ty Compensati on Plan Information

The table below indicates, as of December 31, 2008, in formation with respect to compensation plans (including indiv idual co mp ensation
arrangements) under which equity securities of the registrant are authorized fo r issua nce, aggregated as follows: (i) all co mpensation plans
previously approved by security holders, and (ii) all co mpensation plans not previously approved by security holders.

                                                 Equi ty Compensati on Plan Information
                                                                                                                        Number of securities
                                                                                                                       remaining available for
                                                 Number of securities to                                                future issuance under
                                                 be issued upon exercise          Weighted-average exercise              equity compensation
                                                 of outstanding options,         price of outstanding options,             pl ans (excluding
                                                   warrants and rights                warrants and rights               securities reflected in
                                                                                                                              column (a))
               Plan categ ory                               (a)                                (b)
                                                                                                                                     (c)
Equity co mpensation plans approved by
security holders                                                               -                                    -                                -
Equity co mpensation plans not approved by
security holders                                                     561,191       $                            0.33                           62,356
                   Total                                             561.191       $                            0.33                           62,356

Hol ders

As of June 30, 2009, the approximate nu mber o f stockholders of record of the Co mmon Stock of the Co mpany was 39.




                                        INDEMNIFICATION FOR S ECURITIES ACT LIAB ILITIES

Our Articles of Incorporation provide to the fullest extent permitted by Section 145 of the General Corporat ion Law of the St ate of Delaware
that our directors or officers shall not be personally liable to us or our shareholders for damages for breach of s uch director's or officer's
fiduciary duty. The effect of this provision of our Articles of Incorporation is to eliminate our rights and our shareholders (through
shareholders' derivative suits on behalf of our co mpany) to recover damages against a directo r or officer for breach of the fiduciary duty of care
as a director or officer (including breaches resulting fro m negligent or grossly negligent behavior), except under certain situations defined by
statute. We believe that the indemnification provisions in our Articles of Incorporation are necessary to attract and retain qualified persons as
directors and officers.



Our By Laws also provide that the Board of Directors may also authorize us to indemnify our emp loyees or agents, and to advan ce the
reasonable expenses of such persons, to the same extent, fo llo wing the same determinations and upon the same conditions as are require d fo r
the indemnificat ion of and advancement of expenses to our directors and officers. As of the date of this Registration Stateme nt, the Board of
Directors has not extended indemn ification rights to persons other than directors and officers.



Insofar as indemnificat ion for liabilit ies arising under the Securit ies Act of 1933 may be permitted to directors, officers o r persons controlling
us pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securit ies and Exchang e Co mmission,
such indemn ification is against public policy as expressed in the Securit ies Act of 1933 and is, therefore, une nforceable.


                                                                          46
                                                                LEGAL MATTERS

The validity of our co mmon stock offered hereby will be passed upon by Sichenzia Ross Fried man Ference LLP, New York, New Yo r k.

                                                                     EXPERTS

The consolidated balance sheet of Pimi and its subsidiary as of December 31, 2008 and December 31, 2007, and the related consolidated
statements of operations, changes in stockholders' equity and cash flows for each of the years in the three year period ended December 31, 2008
and for the cumu lative period fro m January 14, 2004 (date of inception) through December 31, 2008 appearing in this prospectus and
registration statement have been so included in reliance on the report of Fahn Kanne & Co., an independent registered public accounting firm,
appearing elsewhere in this prospectus, given on the authority of such firm as experts in accounting and auditing.

      CHANGES IN AND DIS AGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOS URE

None.

                                             WHERE YOU CAN FIND MORE INFORMATION

This prospectus does not contain all of the information in the registration statement and the exh ibits and schedules that wer e filed with the
registration statement. For further info rmation with respect to the common stock and us, we refer you to the regis tration statement and the
exhibits and schedules that were filed with the registration statement. Statements made in this prospectus regarding the cont ents of any contract,
agreement or other document that is filed as an exh ibit to the registration stateme nt are not necessarily co mplete, and we refer you to the full
text of the contract or other document filed as an exhib it to the reg istration statement. A copy of the registration statemen t and the exh ibits and
schedules that were filed with the registration statement may be inspected without charge at the public reference facilities maintained by the
SEC at 100 F Street, N.E., Washington, D.C. 20549, and at the SEC's regional offices at 500 West Madison Street, Suite 1400, Ch icago,
Illinois 60661, Woolwo rth Bu ild ing and 233 Broadway New Yo rk, New York.

                                                                          47
PIMI AGRO CLEANTECH, INC. AND ITS SUBSIDIARY
            (A Development Stage Company)
         Consolidated Financial State ments
        as of March 31, 2009 (unaudited) and
          as of December 31, 2008 (audited)
                             PIMI AGRO CLEANTECH, INC. AND ITS SUBSIDIARY
                                               (A Development Stage Company)
                                              Consolidated Financial Statements
                                             as of March 31, 2009 (unaudited) and
                                               as of December 31, 2008 (audi ted)
                                                       Table of Contents
                                                                                     Page
Report of Independent Registered Public Accounting Firm                               2
Consolidated financial statements
   Balance Sheets                                                                      3
   Statements of Operations                                                            4
   of Changes in Shareholders ’ Equity (Deficit)                                     5– 8
   Statements of Cash Flo ws                                                           9
   Notes to the Consolidated Financial Statements                                   10 – 27




                                                             F-1
Report of Independent Registered Public Accounting Firm
To the Sharehol ders of
PIMI AGRO CLEANTECH, INC. AND ITS S UBS IDIARY
(A Development Stage Company)

We have audited the accompanying consolidated balance sheets of Pimi Agro Cleantech, Inc. (a development stage company) (hereinafter:
the "Company") and its subsidiary as of December 31, 2008 and 2007, and the related consolidated statements of operations, changes in
shareholders’ equity (deficit ) and cash flows for each of the years in the three year period ended December 31, 2008. Th ese consolidated
financial statements are the responsibility of the Board of Directors and management of the Co mpany. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Co mpany Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. The Co mpany is not required to have, nor were we engaged to perform an audit of its internal control over financial
reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit pro cedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's inte rnal control over
financial report ing. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position
of the Co mpany and its subsidiary as of December 31, 2008 and 2007, and the consolidated results of operat ions, changes in shareholders ’
equity (deficit) and cash flows for each of the years in the three year period ended December 31, 2008, in conformity with accounting
principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in
Note 1 to the financial statements, the Company is in the development stage as defined in Statement of Financial Accounting Standa rd No. 7,
"Accounting and Reporting by Development Stage Enterprises". It has not yet generated sufficient revenues from its operations to fund its
activities and is therefore dependent upon external sources for financing its operations. Since inception, the Co mpany has su ffered accumu lated
losses in an amount of US$ 1,999,147 and has a negative operating cash flow of US$ 1,811,293. These matters raise substantial doubt about the
Co mpany’s ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 1. The financial
statements do not include any adjustments that might result fro m the outcome of this uncertainty.


Fahn Kanne & Co.
Cert ified Public Accountants (Isr.)
Tel-Aviv, Israel
July 2, 2009




                                                                        F-2
                                        PIMI AGRO CLEANTECH, INC. AND ITS S UBS IDIARY
                                                  (A Development Stage Company)

                                                   CONSOLIDATED BALANCE S HEETS

                                                                                                       US doll ars
                                                                                     March 31,                  December 31,
                                                                                       2009(*)           2008(*)             2007(*)
                                                                                    (unaudi ted)                  (audited)
                                   AS S E TS
Current Assets
   Cash and cash equivalents                                                              284,244             277,410            35,055
   Accounts receivable                                                                      3,162              13,240             8,438
   Other current assets (Note 3)                                                          166,368              46,602            27,685
     Total current assets                                                                 453,774             337,252            71,178

Property and Equi pment, Net (Note 4 )                                                     20,333             18,280             15,701

Funds in Res pect of Employee Rights Upon Retirement                                       28,569             28,837             20,286

      Total assets                                                                        502,676             384,369           107,165

                LIAB ILITIES , NET OF CAPITAL DEFICIT
Current Liabilities
 Accounts payable:
     Trade (Note 5A)                                                                       65,570              30,906            18,345
     Other (Note 5B)                                                                      212,594             170,017           208,973
     Total current liabilities                                                            278,164             200,923           227,318

Liability for employee rights upon retirement                                              36,218             37,261             20,286

Commi tments (Note 7)
Sharehol ders’ Equity (Deficit) (Note 8)
Co mmon stocks of US$ 0.01 par value ("Co mmon stocks"):
    30,000,000 shares authorized as of March 31, 2009, December 31, 2008 and
    2007; issued and outstanding 6,309,530 shares, 6,031,658 shares and
    4,033,834 shares as of March 31, 2009, December 31, 2008 and 2007,
    respectively                                                                           63,095             60,316             40,338
Additional paid in cap ital                                                             2,382,639          2,114,872          1,145,341
Receipts on account of shares                                                                   -                  -            100,000
Accumulated other comprehensive loss                                                      (38,865 )          (29,856 )          (29,965 )
Deficit accu mu lated during the development stage                                     (2,218,575 )       (1,999,147 )       (1,396,153 )
       Total sharehol ders' equity (deficit)                                              188,294            146,185           (140,439 )

      Total liabilities and sharehol ders ’ equity (deficit)                              502,676             384,369           107,165


(*)     As described in Note 1A, the financial statements were retroactively restated to reflect the historical financial statements of the
        subsidiary Pimi Agro Cleantech Ltd., wh ich was acquired by the Co mpany fro m its shareholders on April 27, 2009.




                                 The accompanying notes are an i ntegral part of the financi al statements.
F-3
                                       PIMI AGRO CLEANTECH, INC. AND ITS S UBS IDIARY
                                                 (A Development Stage Company)

                                         CONSOLIDATED STATEMENTS OF OPERATIONS



                                                                                  US doll ars
                                                                                                                           Cumulati ve
                                                                                                                           peri od from
                                                                                                                           January 14,
                                                                                                                           2004 (date of
                                                                                                                            inception)
                                         Three month period                                                                    until
                                           ended March 31,                        Year ended December 31,                   March 31,
                                         2009(*)         2008(*)              2008(*)       2007(*)       2006(*)             2009(*)
                                             (unaudi ted)                                (audited)                         (unaudi ted)
Revenues                                     9,306          2,410              104,612         15,763       29,454                182,592
Research and development
    expenses (Note 9)                    (191,852 )        (63,907 )          (515,154 )        (319,015 )    (452,004 )       (1,713,424 )
General and administrative
    expenses (Note 10)                    (32,832 )        (28,093 )          (187,032 )        (190,036 )    (150,818 )         (576,352 )
  Operating loss                         (215,378 )        (89,590 )          (597,574 )        (493,288 )    (573,368 )       (2,107,184 )
Financing expenses (income), net            (4,050 )          (861 )             (5,420 )          (1,757 )    (11,813 )          (31,057 )
  Loss from continuing operation         (219,428 )        (90,451 )          (602,994 )        (495,045 )    (585,181 )       (2,138,241 )
Income (loss) fro m discontinued
    operation (in 2007 includes
    capital gain on disposal of
    US$ 245,574), net (Note 14)                 -                -                   -           153,592      (246,234 )          (80,334 )
      Net loss for the period            (219,428 )        (90,451 )          (602,994 )        (341,453 )    (831,415 )       (2,218,575 )


Loss per share from continuing
    operation (Note 12)                      (0.04 )          (0.02 )             (0.12 )           (0.43 )      (4.82 )


Earnings (loss) per share from
   discontinued operation (Note
   12)                                            -                -                   -             0.13        (2.03 )


Net l oss per share (Note 12)                (0.04 )          (0.02 )             (0.12 )            (0.3 )      (6.85 )




(*)      As described in Note 1A, the financial statements were retroactively restated to reflect the historical financial s tatements of the
         subsidiary Pimi Agro Cleantech Ltd., wh ich was acquired by the Co mpany fro m its shareholders on April 27, 2009.



                                The accompanying notes are an i ntegral part of the financi al statements.



                                                                        F-4
                                          PIMI AGRO CLEANTECH, INC. AND ITS S UBS IDIARY
                                                    (A Development Stage Company)


                            STATEMENTS OF CHANGES IN S HAREHOLDERS ’ EQUITY (DEFICIT) (*)

                                                              US Dollars (except for share data)
                                                                     Accumulated            Receipts                              Total
                            Common stock                                 other                on                              shareholders
                                                    Additional
                          Number          Amoun      pai d in       comprehensive         account of       Accumulated
                          of shares         t        capital         income (loss)          shares            deficit        equity (deficit)
January 14, 2004 (date
    of inception)                     -         -              -                     -                 -                 -                      -
120,000 common stock
    issued for cash of
    US$ 0.002 per
    share                   120,000         1,200          (932 )                    -                 -                 -                268
Balance as of
    December 31,
    2004 (audited)          120,000         1,200          (932 )                    -                 -                 -                268



Loss for the year                     -         -              -                     -                 -       (223,285 )            (223,285 )
Gain on translation of
    subsidiary
    functional currency
    to the reporting
    currency                          -         -              -                5,989                  -                 -              5,989
Total comprehensive
    loss                                                                                                                             (217,296 )
Receipts on account of
    shares                            -         -              -                     -       100,000                     -           100,000
Balance as of
    December 31,
    2005 (audited)          120,000         1,200          (932 )               5,989        100,000           (223,285 )            (117,028 )

Loss for the year                     -         -              -                     -                 -       (831,415 )            (831,415 )
Loss on translation of
    subsidiary
    functional currency
    to the reporting
    currency                          -         -              -              (12,748 )                -                 -            (12,748 )
Total comprehensive
    loss                                                                                                                             (844,163 )
Issuance of 25,200
    common stock for
    cash of US$ 7.50
    per share on
    January 2, 2006          25,200          252        188,748                      -      (100,000 )                   -             89,000
Issuance of 24,000
    common stock for
    cash of US$ 7.56
    per share on
    July 19, 2006            24,000          240        181,293                      -                 -                 -           181,533
Issuance of 72,000
    common stock for
    cash of US$ 7.53
    per share on
    December 28, 2006        72,000          720        541,600                      -                 -                 -           542,320
Issuance of 1,688             1,688           17         14,043                      -                 -                 -            14,060
    common stock for
    cash of US$ 8.33
    per share on
    December 28, 2006
Receipts on account of
    shares                       -           -                -                     -        33,644                   -            33,644
Balance as of
    December 31,
    2006 (audited)        242,888       2,429          924,752                (6,759 )       33,644         (1,054,700 )         (100,634 )


(*)     As described in Note 1A, the financial statements were retroactively restated to reflect the historical financial statements of the
        subsidiary Pimi Agro Cleantech Ltd., wh ich was acquired by the Co mpany fro m its shareholders on April 27, 2009.
                               The accompanying notes are an i ntegral part of the financi al statements.



                                                                   F-5
                                         PIMI AGRO CLEANTECH, INC. AND ITS S UBS IDIARY
                                                   (A Development Stage Company)


                         STATEMENTS OF CHANGES IN S HAREHOLDERS ’ EQUITY (DEFICIT) (*) (cont.)

                                                              US Dollars (except for share data)
                            Common stock                                Accumulated
                                                                                             Receipts
                                                       Additional           other               on                               Total
                         Number                         pai d in       comprehensive        account of     Accumulated       shareholders
                         of shares        Amount        capital         income (loss)         shares          deficit       equity (deficit)

Loss for the year                    -             -               -                   -             -         (341,453 )          (341,453 )
Loss on translation of
    subsidiary
    functional
    currency to the
    reporting currency               -             -               -            (23,206 )            -                 -             (23,206 )
Total comprehensive
    loss                                                                                                                           (364,659 )
Issuance of 8,708
    common stock for
    cash of US$ 2.37
    per share, 30,006
    common stock for
    cash of US$ 3.28
    per share, 7,754
    common stock for
    cash of
    US$ 0.0025 per
    share and 591
    common stock for
    cash of US$ 3.45
    per share in April
    2007                      47,059          471          119,375                     -       (33,644 )               -             86,202
Issuance of 6,937
    common stock for
    cash of US$ 4.10
    per share in June
    2007                       6,937          69            28,339                     -             -                 -             28,408
Issuance of 747,390
    common stock for
    cash of US$ 0.078
    per share in July
    2007                    747,390         7,474           51,061                     -             -                 -             58,535
Issuance of 996,520
    common stock for
    cash of US$ 0.024
    per share in
    August 2007             996,520         9,965           14,007                     -             -                 -             23,972
Issuance of 996,520
    common stock for
    cash of US$ 0.024
    per share in
    November 2007           996,520         9,965           15,212                     -             -                 -             25,177
Issuance of 996,520
    common stock for
    cash of
    US$ 0.0026 per          996,520         9,965            (7,405 )                  -             -                 -               2,560
    share in
    December 2007
Receipts on account of
    shares                          -           -                -                    -      100,000                   -           100,000
Balance as of
    December 31,
    2007 (audited)         4,033,834       40,338        1,145,341             (29,965 )     100,000         (1,396,153 )         (140,439 )


(*)      As described in Note 1A, the financial statements were retroactively restated to reflect the historical financial statements of the
         subsidiary Pimi Agro Cleantech Ltd., wh ich was acquired by the Co mpany fro m its shareholders on April 27, 2009.



                                The accompanying notes are an i ntegral part of the financi al statements.




                                                                     F-6
                                         PIMI AGRO CLEANTECH, INC. AND ITS S UBS IDIARY
                                                   (A Development Stage Company)

                         STATEMENTS OF CHANGES IN S HAREHOLDERS ’ EQUITY (DEFICIT) (*) (cont.)

                                                              US Dollars (except for share data)
                            Common stock                               Accumulated
                                                      Additional           other           Receipts on                            Total
                         Number                        pai d in       comprehensive         account of     Accumulated        shareholders
                         of shares       Amount        capital         income (loss)          shares          deficit        equity (deficit)

Loss for the year                    -            -              -                    -               -         (602,994 )          (602,994 )
Gain on translation of
    subsidiary
    functional
    currency to the
    reporting
    currency                         -            -              -                 109                -                  -                109
Total comprehensive
    loss                                                                                                                            (602,885 )

Issuance of 716,589
    common stock for
    cash of
    US$ 0.041 per
    share in February
    2008                    716,589         7,166          22,370                     -               -                  -            29,536
Issuance of 235,334
    common stock for
    cash of US$ 0.72
    per share in
    February 2008           235,334         2,353         166,600                     -       (100,000 )                 -            68,953
Issuance of 291,515
    common stock for
    cash of US$ 0.69
    per share in June
    2008                    291,515         2,915         197,085                     -               -                  -           200,000
Issuance of 310,382
    common stock for
    cash of US$ 0.71
    per share in
    September 2008          310,382         3,104         216,161                     -               -                  -           219,265
Issuance of 444,004
    common stock for
    cash of US$ 0.74
    per share in
    November 2008           444,004         4,440         323,548                     -               -                  -           327,988
Stock based
    compensation                     -            -        43,767                     -               -                  -            43,767
Balance as of
    December 31,
    2008 (audited)        6,031,658        60,316       2,114,872              (29,856 )              -       (1,999,147 )           146,185


(*)      As described in Note 1A, the financial statements were retroactively restated to reflect the historical financial statements of the
         subsidiary Pimi Agro Cleantech Ltd., wh ich was acquired by the Co mpany fro m its shareholders on April 27, 2009.




                                The accompanying notes are an i ntegral part of the financi al statements.
F-7
                                        PIMI AGRO CLEANTECH, INC. AND ITS S UBS IDIARY
                                                  (A Development Stage Company)

                         STATEMENTS OF CHANGES IN S HAREHOLDERS ’ EQUITY (DEFICIT) (*) (cont.)
                                                         (unaudi ted)
                                                       US Dollars (except for share data)
                              Common stock                       Accumulated
                                                                                      Receipts
                                               Additional            other               on                                      Total
                          Number                pai d in        comprehensive        account of Accumulated                  shareholders
                          of shares     Amount  capital          income (loss)         shares      deficit                  equity (deficit)

Loss for the year                   -           -                -                     -            -          (219,428 )          (219,428 )
Loss on translation of
    subsidiary
    functional
    currency to the
    reporting currency              -           -                -               (9,009 )           -                  -              (9,009 )
Total comprehensive
    loss                                                                                                                           (228,437 )

Issuance of 26,399
    common stock for
    cash of US$ 1.33
    per share in
    January 2009              26,399          264           34,736                     -            -                  -             35,000
Issuance of 3,773
    common stock for
    cash of US$ 1.33
    per share in
    March 2009                 3,773           38            4,962                     -            -                  -               5,000
Issuance of 205,345
    common stock for
    cash of US$ 0.73
    per share in
    March 2009               202,372        2,024           14,976                     -            -                  -            145,000
Issuance of 45,328
    common stock for
    cash of US$ 1.32
    per share in
    March 2009                45,328          453           59,547                     -            -                  -             60,000
Stock based
    compensation                    -           -           25,546                     -            -                  -             25,546
Balance as of March
    31, 2009
    (unaudited)            6,309,530       63,095        2,382,639             (38,865 )            -        (2,218,575 )           188,294


(*)      As described in Note 1A, the financial statements were retroactively restated to reflect the historical financial statements of the
         subsidiary Pimi Agro Cleantech Ltd., wh ich was acquired by the Co mpany fro m its shareholders on April 27, 2009.



                                The accompanying notes are an i ntegral part of the financi al statements.



                                                                     F-8
                                        PIMI AGRO CLEANTECH, INC. AND ITS S UBS IDIARY
                                                  (A Development Stage Company)

                                          CONSOLIDATED STATEMENTS OF CAS H FLOWS

                                                                          US doll ars
                                                                                                                   Cumulati ve
                                                                                                                   peri od from
                                                                                                                   January 14,
                                                                                                                   2004 (date of
                                                                                                                    inception)
                                        Three month period                                                             until
                                         ended March 31,                   Year ended December 31,                  March 31,
                                        2009(*)         2008(*)       2008(*)         2007(*)        2006(*)          2009(*)
                                            (unaudi ted)                           (audited)                       (unaudi ted)
Cash flows from operating
acti vi ties:
  Net loss for the period               (219,428 )       (90,451 )    (602,994 )        (341,453 )   (831,415 )       (2,218,575 )
  Adjustments to reconcile net
      loss for the period to net cash
      used in operating activities:
  Depreciat ion                             1,985          1,635         7,325             5,766        2,709             18,034
  Increase in accrued severance
      pay                                  2,469           9,266        17,747             3,948        8,658             38,004
  Stock based compensation                25,546               -        43,767                 -            -             69,313
  Interest from shareholders
      loans                                      -                -           -                 -       (9,723 )           (2,409 )
  Changes in assets and
      liabilities:
  Decrease (increase) in accounts
      receivable                            9,147          6,156        (4,988 )          (4,123 )      8,889              (3,355 )
  Decrease (increase) in other
      current accounts                    (15,246 )        7,401       (19,718 )         (17,266 )    (94,346 )         (157,685 )
  Increase (decrease) in accounts
      payable – trade                     38,741          24,937        13,092           (15,367 )     11,422             66,359
  Increase (decrease) in accounts
      payable – other                     60,154         (51,446 )     (43,863 )        141,878        35,631            202,055
  Net cash used in operating
      activities generated fro m
      continuing operations               (96,632 )      (92,503 )    (589,632 )        (226,617 )   (868,175 )       (1,988,259 )
  Net cash provided in (used in)
      operating activities generated
      fro m d iscontinued operations
      (in 2007 includes capital
      gain on disposal of
      US$ 245,574)                               -                -           -         (153,592 )    246,234             80,334
  Net cash used in operating
      activities                          (96,632 )      (92,503 )    (589,632 )        (380,209 )   (621,941 )       (1,907,925 )
Cash flows from investment
acti vi ties:
  Increase in funds in respect of
      emp loyee rights upon
      retirement                           (2,469 )       (1,786 )      (8,816 )          (3,948 )      (8,658 )         (29,073 )
  Purchase of property and
      equipment                            (5,845 )       (2,978 )      (9,866 )            (319 )    (19,027 )          (37,561 )
  Net cash used in investment
      activities                           (8,314 )       (4,764 )     (18,682 )          (4,267 )    (27,685 )          (66,634 )
Cash flows from financing
acti vi ties
  Cred it fro m banking
      institutions                              -               -                 -                 -            (2,730 )               (21 )
  Issuance of common stock                245,000          98,490           845,744           224,661           632,629           1,948,302
  Payment on account of shares                  -               -                 -           100,000            33,644             233,644
  Loans fro m shareholders                      -               -                 -                 -            14,083             194,083
  Deferred issuance expenses             (112,874 )             -                 -                 -                 -            (112,874 )
  Net cash provided by financing
      activities                          132,126          98,490           845,744           324,661           677,626           2,263,134

  Effect of exchange rate
     changes on cash and cash
     equivalents                          (20,346 )         2,642             4,925             6,140             6,370               (4,331 )
Increase (decrease) in cash and
  cash equivalents                          6,834           3,865           242,355           (53,675 )          34,370             284,244
Cash and cash equivalents at
  beginning of the period                 277,410          35,055            35,055            88,730            54,360                     -
  Cash and cash equivalents at
     end of the period                    284,244          38,920           277,410            35,055            88,730             284,244


(*)   As described in Note 1A, the financial statements were retroactively restated to reflect the historical financial statemen ts of the
      subsidiary Pimi Agro Cleantech Ltd., wh ich was acquired by the Co mpany fro m its shareholders on April 27, 2009.

Supplementary informati on on financing acti vities not invol ving cash flows
During 2006, the Co mpany loans fro m shareholders were converted into 24,000 co mmon stock for an amount of US$ 180,000.
During 2007, the Co mpany loans fro m shareholders were converted into 52,776 co mmon stock for an amount of US$ 14,477.
The balance as of December 31, 2006 o f other current assets included US$ 14,284 with respect to shares issued to all investors (the amount was
paid after balance sheet date).


                                  The accompanying notes are an i ntegral part of the financi al statements.


                                                                     F-9
                                     PIMI AGRO CLEANTECH, INC. AND ITS S UBS IDIARY
                                               (A Development Stage Company)

                                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
             (Informati on as at March 31, 2009 and for the three months ended March 31, 2009 and 2008 is unaudi ted)



NOTE 1   -      GEN ERAL

              A.     Pimi Agro Cleantech, Inc. (the "Co mpany") was incorporated on April 1, 2009, under the laws of the State of
                     Delaware. On April 27, 2009, the Co mpany acquired fro m its shareholders all of the issued and outstanding shares of
                     Pimi Agro Cleantech Ltd. (hereinafter: "Pimi Israel") including preferred and ordinary shares. As a consideration for
                     the transaction, the Co mpany issued its shareholders an equal number of its common stock (6,313,589 shares). As a
                     result of the acquisition, Pimi Israel became a wholly-owned subsidiary of the Co mpany. The transaction involved
                     companies under common control, and accordingly the acquisition has been accounted for at historical cost in a
                     manner similar to a pooling of interests. On this basis, the stockholders ’ equity has been retroactively restated to
                     reflect the equivalent nu mber of shares of co mmon stock of the Co mpany issued for the acquisition of Pimi Israel as if
                     such shares were issued at the dates they were issued by Pimi Israel to its shareholders on the basis of 1 Co mmon
                     Stock for each 1 preferred share or 1 o rdinary share of Pimi Israel. The h istorical financial statements prior to April 27,
                     2009 reflect the activities of Pimi Israel.

                     Pimi Israel was incorporated in 2004 and co mmenced its operations in 2005. Pimi Israel develops, produces and
                     markets products for improving the quality and extending the shelf -life of fruits and vegetables. Since its inception,
                     Pimi Israel has devoted substantially all of its efforts to business planning, research and development and raising
                     capital, and has not yet generated significant revenues. Accordingly, Pimi Israel is considered to be in the
                     development stage as defined in Statement of Financial Accounting Standards ("SFAS") No. 7, "Accounting and
                     Reporting by Development Stage Enterprises" .

              B.     The development and co mmercialization of Pimi Israel's product will require substantial expenditures. Pimi Israel has
                     not yet generated sufficient revenues fro m its operations to fund its activities, and is therefore dependent upon external
                     sources for financing its operations. There can be no assurance that Pimi Israel will succeed in obtaining the necessary
                     financing to continue its operations. Since inception, Pimi Israel has suffered accumulated losses in an amount of
                     US$ 2,218,575 and has a negative operating cash flow of US$ 1,907,925. These factors raise substantial doubt about
                     Pimi Israel's ability to continue as a going concern.

                     The financial statements do not include any adjustments that might result fro m the outcome of th is uncertainty.

              C.     The consolidated financial statements were prepared in accordance with accounting princip les generally accepted in
                     the United States of America ("US GAAP").

              D.     Risk factors

                     The Co mpany and Pimi Israel (the " Group") have a limited operating history and faces a number of risks, including
                     uncertainties regarding finalization of the develop ment process, demand and market acceptance of the Group's
                     products, the effects of technological change, competit ion and the development of other new products. Additionally,
                     other risk factors also exist, such as the ability to manage growth and the effect of planned expansion of operations on
                     the Group's future results.

                     In addition, the Group expects to continue incurring significant operating costs and losses in connection with the
                     development of its products and increased marketing effo rts.

                     As mentioned above, the Group has not yet generated significant revenues from its operations to fund its activities, and
                     therefore the continuance of its activities as a going concern depends on the receipt of additional funding fro m its
                     shareholders and investors.




                                                                    F-10
                                       PIMI AGRO CLEANTECH, INC. AND ITS S UBS IDIARY
                                                 (A Development Stage Company)

                               NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)
              (Informati on as at March 31, 2009 and for the three months ended March 31, 2009 and 2008 is unaudi ted)



NOTE 1   -          GEN ERAL (cont.)

         E.      Use of estimates in the preparati on of fi nancial statements

                 The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates
                 and assumptions that affect the reported amounts of assets and liabilit ies and the disclosure of contingent assets and
                 liab ilit ies at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the
                 reporting periods. Actual results could differ fro m those estimates.

         F.      Unaudi ted Interi m Fi nancial Statements

                 The accompanying unaudited financial statements as of March 31, 2009 and for the three months ended March 31, 2009
                 and 2008 were prepared in accordance with accounting principles generally accepted in the United States of America. In the
                 opinion of management, the unaudited financial statements presented herein include all adjustments necessary for a fair
                 presentation of the Co mpany’s financial position at March 31, 2009 and the results of its operations and its cash flows for
                 the three month periods ended March 31, 2009 and 2008. A ll such adjustments are of a normal recurring nature. Interim
                 financial statements are prepared on a basis consistent with the Co mpany ’s annual financial statements. Results of
                 operations for the three month period ended March 31, 2009 are not necessarily indicative of the operating results that may
                 be expected for the entire year ending December 31, 2009.

NOTE 2   -          S IGNIFICANT ACCOUNTING POLICIES

         A.      Functi onal currency and translation to the reporting currency

                 The functional currency of the Co mpany is the US dollar (“US$”), wh ich is the currency of the primary economic
                 environment in which the operations of the Co mpany are conducted. The functional currency of its foreign subsidiary is the
                 New Israeli Shekel ("NIS").

                 The financial statements of the subsidiary were translated into U.S. dollars in accordance with the principles set forth in
                 SFAS No. 52 of the U.S. Financial Accounting Standards Board ("FASB"). Accordingly, assets and liabilit ies were
                 translated from NIS to U.S. dollars using year-end exchange rates, and income and expense items were translated at average
                 exchange rates during the year.

                 Gains or losses resulting fro m t ranslation adjustments are reflected in shareholders' equity, under “accumulated other
                 comprehensive income (loss)”.

                 Balances denominated in, or linked to foreign currency are stated on the basis of the exchange rates prevailing at the
                 balance sheet date. For foreign currency transactions included in the statement of operations, the exchange rates applicable
                 on the relevant transaction dates are used. Transaction gains or losses arising fro m changes in the exchange rates used in
                 the translation of such balances are carried to financing inco me or expenses.




                                                                    Three month period                         Year ended
                                                                      ended March 31,                         December 31,
                                                                     2009         2008                2008         2007               2006
                 Official exchange rate of NIS 1                        0.239         0.281             0.263         0.260              0.237

               B.      Principles of consoli dation
The consolidated financial statements include the accounts of the Co mpany and its subsidiary. All significant
intercompany balances and transactions have been eliminated on consolidation.

As described in Note 1A above, the acquisition of Pimi Israel has been accounted for in a manner similar to a pooling
of interests at historical cost.




                                             F-11
                                     PIMI AGRO CLEANTECH, INC. AND ITS S UBS IDIARY
                                               (A Development Stage Company)

                              NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)
             (Informati on as at March 31, 2009 and for the three months ended March 31, 2009 and 2008 is unaudi ted)



NOTE 2   -      SIGNIFICANT ACCOUNTING POLICIES (cont.)
              C.   Cash and cash equi valents

                     The Group considers all highly liquid investments, which include short -term bank deposits that are not restricted as to
                     withdrawal or use, and short-term debentures, with original periods to maturity not exceeding three months, to be cash
                     equivalents.

              D.    Property and equi pment
                   1.    Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the
                         straight-line method over the estimated useful lives of the assets. When asset are retired or otherwise disposed
                         of, the related carry ing value and accu mulated depreciation are removed fro m the respective accounts and the net
                         difference less any amount realized fro m d isposition is reflected in the statements of operations.

                   2.      Rates of depreciation:
                                                                     %
                          Co mputers                                 33
                          Furniture and office equip ment            7-15

              E.     Impairment of long -li ved assets

                     The Group's long-lived assets are reviewed for impairment in accordance with SFAS No. 144 "Accounting for the
                     Impairment or Disposal of Long-Lived Assets ", whenever events or changes in circu mstances indicate that the carrying
                     amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a co mparison
                     of the carry ing amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such
                     assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the
                     carrying amount of the asset exceeds its fair value. The Group have not recorded any impairment losses in the reported
                     periods.

              F.     Deferred i ncome taxes

                     The Group accounts for income taxes in accordance with SFAS No. 109, "Accounting for Income Taxes" . According
                     to SFAS No. 109, deferred income taxes are determined utilizing the asset and liability method based on the estimated
                     future tax effects of differences between the financial accounting and the tax bases of assets and liabilities under the
                     applicable tax law. Deferred tax balances are computed using the tax rates expected to be in effect at the time when
                     these differences reverse. Valuation allowances in respect of the deferred tax assets are provided for if, based upon the
                     weight of availab le evidence, it is more likely than not that all or a portion of the deferred inco me tax assets will not be
                     realized.

              G.     Liability for employee rights upon retirement

                     Pimi Israel's liability fo r emp loyee rights upon retirement with respect to its Israeli employees is calculated, pursuant to
                     Israeli severance pay law, based on the most recent salary of each employee mult iplied by the number of years of
                     emp loyment, as of the balance sheet date. Employees are entitled to one month's salary for each year of employ ment,
                     or a portion thereof. Pimi Israel makes monthly deposits to insurance policies and severance pay funds. The liab ility of
                     the Co mpany is fully provided for.

                     The deposited funds include profits accumulated up to the balance sheet date. The deposited funds may be withdrawn
                     upon the fulfillment of the obligation pursuant to Israeli severance pay laws or labor agreements. The value of the
                     deposited funds is based on the cash surrender value of these policies, and includes immaterial profits/losses.
F-12
                                     PIMI AGRO CLEANTECH, INC. AND ITS S UBS IDIARY
                                               (A Development Stage Company)

                              NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)
             (Informati on as at March 31, 2009 and for the three months ended March 31, 2009 and 2008 is unaudi ted)



NOTE 2   -     SIGNIFICANT ACCOUNTING POLICIES (cont.)
              G.  Liability for employee rights upon retirement (cont.)

                     Severance expenses for the three month periods ended March 31, 2009 and 2008, and for the years ended
                     December 31, 2008, 2007 and 2006 amounted to US$ 2,469, US$ 9,266, US$ 17,747, US$ 3,948 and US$ 8,658,
                     respecti vely.

              H.     Revenues from sales of products

                     Revenues are recognized in accordance with Staff Accounting Bullet in ("SA B") No. 104, Revenue recognition when
                     delivery has occurred and, where applicable, after installat ion has been completed, there is persuasive evidence of an
                     agreement, the fee is fixed or determinable and co llect ion of the related receivables is reasonably assured and no
                     further obligations exist.

                     Revenues from sales are recognized when title and risk and rewards for the products are transferred to the
                     customer, net of provisions for estimated returns and discounts.

              I.     Research and development costs

                     The Group accounts for research and development costs in accordance with the SFAS No. 2, " Accounting for
                     Research and Development Costs ". Under SFAS 2, all research and development costs must be expensed as incu rred.
                     Grants received fro m the Govern ment of Israel for development of approved projects are recognized as a reduction of
                     expenses when the related costs are incurred (see also J. below).

              J.     Royalty-bearing grants

                     Royalty-bearing grants fro m the Office of the Ch ief Scientist of the Min istry of Industry, Trade and Labor of Israel
                     (the "OCS") for funding approved research and development projects are recognized at the time Pimi Israel is entitled
                     to such grants, on the basis of the costs incurred and included as a reduction of research and development
                     costs. Research and development grants recognized in 2008 and 2007 amounted to US$ 30,505 and US$ 91,248,
                     respectively (cumu lative since inception US$ 121,753).

                     As of March 31, 2009, 2008 and December 31, 2008, the Co mpany has not accrued any royalties, since no revenues
                     were recognized in respect of the funded project.

              K.     Earning per share

                     Basic earn ing (loss) per share are co mputed by dividing net income (loss) by the weighted average number of shares
                     outstanding during the year.

                     In computing diluted earning per share, basic earning per share are adjusted to reflect the potential d ilution that could
                     occur upon the exercise of options issued using the treasury stock method, if their effect is dilutive.

              L.     Stock-based compensation

                     The Group applies the provisions of SFAS No. 123R, "Share Based Pay ment" ("SFAS 123R"), wh ich requires all
                     share-based payments, including grants of stock options, to be recognized in the statement of operations as an
                     operating expense, based on the fair value of the award on the date of grant. The fair value of stock-based
                     compensation is estimated using the Black Scholes option-pricing model. The Group has expensed compensation
                     costs, net of estimated forfeitures, applying the accelerated vesting method, over the requisite service period.

                     Share-based payments awarded to consultants (non-employees) are accounted for in accordance with EITF No. 96-18
                     "Accounting for Equity Instruments that are Issued to other than Employees for Acquiring or in connection with
Selling Goods or Services" .




                               F-13
                                       PIMI AGRO CLEANTECH, INC. AND ITS S UBS IDIARY
                                                 (A Development Stage Company)

                                  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)
              (Informati on as at March 31, 2009 and for the three months ended March 31, 2009 and 2008 is unaudi ted)



NOTE 2    -  SIGNIFICANT ACCOUNTING POLICIES (cont.)
         M. Discontinued operati ons

               Under SFAS 144, "Accounting for the Impairment or Disposal of long-lived Assets" when a component of an entity, as
               defined in SFAS 144, has been disposed of or is classified as held for sale, the results of its operations, including the gain or
               loss on its disposal should be classified as discontinued operations and the assets and liabilities of such component should be
               classified as assets and liabilit ies attributed to discontinued operations. The operations, assets and liab ilities of the co mponent
               (see Note 14) have been eliminated fro m the Group's operations and the Group will no longer have any significant continuing
               involvement in the operations of the component.

         N.    Comprehensi ve income (loss)

               Co mprehensive income (loss), presented in shareholders' equity, includes, in addition to net income (loss), translation gains
               and losses fro m the translation of subsidiary functional currency to the reporting currency.

         O.    Recentl y issued accounting pronouncements

                S FAS 141(R), "Business Combi nations"

               In December 2007, the FASB issued SFAS 141(R), “Business Combinations” . This Statement will replace SFAS 141,
               “Business Combinations” (“SFAS 141(R)”). SFAS 141(R) retains the fundamental requirements of SFAS 141 with respect to
               the implementation of the acquisition method of accounting (“the purchase method”) for all business combinations and for the
               identification of the acquirer for each business combination. This Statement also establishes principles and requirements for
               how the acquirer recognizes and measures in its financial statements the identifiab le assets acquired, the liabilities assume d,
               and any noncontrolling interest in the acquiree, how the acquirer recognizes and measures the goodwill acquired in a business
               combination and the disclosure requirements to enable users of the financial statements to evaluate the nature and financial
               effects of the business combination.

               SFAS 141(R) will apply prospectively to business combinations for which the acquisition date is on or after December 15,
               2008 (January 1, 2009 fo r the Group). Early adoption of SFAS 141(R) is prohibited. The Group has not yet evaluated this
               statement for the impact, if any, that it will have on the financial position and results of operations on the Group.

               SFAS 160, "Noncontrolling Interests in Consolidated Financial Statements"

               In December 2007, the FASB issued SFAS 160, “Noncontrolling Interests in Consolidated Financial Statements” (“SFAS
               160”). Th is Statement amends ARB 51 and establishes accounting and reporting standards for the noncontrolling (minority)
               interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS 160 clarifies that a noncontrolling interest in a
               subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financia l
               statements. SFAS 160 is effective for fiscal years beginning on or after December 15, 2008 (January 1, 2009 for the
               Group). Early adoption of SFAS 160 is prohib ited. The Group has not yet determined the impact, if any, that SFAS 160 will
               have on its financial position and results of operations.




                                                                      F-14
                              NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)
             (Informati on as at March 31, 2009 and for the three months ended March 31, 2009 and 2008 is unaudi ted)

NOTE 2         -           SIGNIFICANT ACCOUNTING POLICIES (cont.)
              O.       Recentl y issued accounting pronouncements (cont.)

                       SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Princi ples"

                       In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles" ("SFAS
                       162"). SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles to be
                       used in the preparation of financial statements of nongovernmental entities that are presented in conformity with
                       generally accepted accounting principles in the United States (the GAAP hierarchy). SFAS 162 is effective sixty days
                       following the SEC's approval o f PCAOB amendments to AU Section 411, "The Meaning of 'Present Fairly in
                       Conformity With Generally Accepted Accounting Princip les'". The Group is currently adhere to the hierarchy of
                       GAAP as presented in SFAS 162, and the adoption is not expected to have a material impact on the financial position
                       and results of operations on the Group.

                       SFAS No. 165, “Subsequent Events”

                       In May 2009, the FASB issued SFAS No. 165, “Subsequent Events”. This statement establishes general standards of
                       accounting and disclosure of events that occur after the balance sheet date but before financial statements are issued or
                       are available to be issued. SFAS No. 165 is effective for interim or annual financial periods ending after June 15, 2009.
                       The Co mpany does not expect the adoption of SFAS No. 165 to have any material impact on its consolidated results of
                       operations, financial positions and cash flows.

NOTE 3        -        OTHER CURRENT ASS ETS



                                                                                                                US doll ars
                                                                                                March 31,                December 31,
                                                                                                  2009               2008            2007
                                                                                               (unaudi ted)                (audited)
                  Prepaid expenses                                                                  126,186              9,546         12,496
                  Govern ment of Israel – including part icipation in research and
                      development expenses                                                            34,563           28,754          15,189
                  Advances to suppliers                                                                5,619            8,302               -
                                                                                                     166,368           46,602          27,685




NOTE 4   -        PROPERTY AND EQUIPMENT, NET
                                                                                                                US doll ars
                                                                                                March 31,                December 31,
                                                                                                  2009               2008            2007
                                                                                               (unaudi ted)                (audited)
                  Co mputers                                                                         19,063            18,913          16,992
                  Furniture and office equip ment                                                    18,270            15,976           8,296
                                                                                                     37,333            34,889          25,288
                  Less – accumulated depreciation                                                   (17,000 )         (16,609 )        (9,587 )
                                                                              20,333         18,280         15,701


In the three month periods ended March 31, 2009 and 2008, and for the years ended December 31, 2008, 2007 and 2006,
depreciation was US$ 1,985, US$ 1,635, US$ 7,325, US$ 5,766 and US$ 2,709, respectively, and additional equipment was
purchased in an amount of US$ 5,845, US$ 2,978, US$ 9,866, US$ 319 and US$ 19,027, respectively.


                                               F-15
                                       PIMI AGRO CLEANTECH, INC. AND ITS S UBS IDIARY
                                                 (A Development Stage Company)


                               NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)
              (Informati on as at March 31, 2009 and for the three months ended March 31, 2009 and 2008 is unaudi ted)



NOTE 5    -      ACCOUNTS PAYAB LE
         A.     Trade
                                                                                                               US doll ars
                                                                                                March 31,               December 31,
                                                                                                  2009              2008            2007
                                                                                               (unaudi ted)               (audited)
                 Open accounts                                                                       50,811           14,344          11,983
                 Checks payable                                                                      14,759           16,562           6,362
                                                                                                     65,570           30,906          18,345


         B.     Other
                                                                                                         US doll ars
                                                                                       March 31,                   December 31,
                                                                                         2009                 2008              2007
                                                                                      (unaudi ted)                   (audited)
                 Emp loyees and related institutions                                        40,942             100,368           149,881
                 Deferred revenue                                                           12,575                     -               -
                 Accrued expenses                                                          150,065              69,649            59,092
                 Other                                                                         9,012                   -               -
                                                                                           212,594 (*)         170,017 (*)       208,973 (*)

                 (*)Related parties                                                          100,851            112,563             56,550




NOTE 6    -         LINES OF CREDIT
                       As of March 31, 2009, the Co mpany did not use any of its cred it facilit ies with two Israeli banks. As of March 31,
                       2009, the Co mpany has an aggregated unutilized cred it line o f NIS 117,000 (US$ 27,937). See also Notes 13D and
                       13F.



NOTE 7          -             COMMIT MENTS
               A.      Pimi Israel is committed to pay royalties to the Chief Scientist of the Israeli M inistry of Industry, Trade and Labor on
                       the proceeds from sales of systems resulting from research and development projects in which the Office of the Chief
                       Scientist ("OCS") participates by way of grants. In the first 3 years of sales the Co mpany shall pay 3% out of the sales
                       of the product which was developed under the research and development projects. In the fourth, fifth and sixth years of
                       sales, the Company shall pay 4% of such sales and from the seventh year onwards the Company shall pay 5% in the
                       first 3 years of sales up to 100% of the amount of grants received plus interest at LIBOR. Pimi Israel is entitled to the
                       grants only upon incurring research and development expenditure. There were no future performance obligations
                       related to the grants received fro m the OCS. As of March 31, 2009, the contingent liabilities with respect to grants
                       received fro m the OCS, subject to repayment under these royalty agreements on fut ure sales is NIS 484,429
                       (US$ 115,671), not including interest.

               B.      On December 31, 2008, the Co mpany currently leases office space at Kibbutz Alonim. The Co mpany currently pays
                       monthly rent of NIS 2,100 (US$ 501) plus VAT per month pursuant to a 12 month lease with an option to an additional
12 month period.




                   F-16
                                 PIMI AGRO CLEANTECH, INC. AND ITS S UBS IDIARY
                                           (A Development Stage Company)

                          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)
         (Informati on as at March 31, 2009 and for the three months ended March 31, 2009 and 2008 is unaudi ted)



NOTE 7     -           COMMIT MENTS (cont.)
          C.     On January 9, 2008, Pimi Israel signed a Consulting Agreement with the Center for Potato Research in a Warm
                 Climate Ltd. (the "Center") which is controlled by Pimi members of the Advisory board. Under the Agreement, Pimi
                 Israel is obligated to pay a consulting fee in an amount of NIS 10,000 (US$ 2,388) a month plus VAT against a tax
                 invoice to the Center. Fo llowing a cap ital raise by Pimi Israel, the monthly consultancy fee shall be NIS 12,000
                 (US$ 2,865) a month. The consultancy period is for three years co mmencing January 1, 2008 and may be extended.

          D.     Joint venture Agreement with Vegisafe

                 In January 2009, Pimi Israel entered in a Joint Venture Agreement ("JV") with Veg isafe LLC (" Vegisafe") a Limited
                 Liability Co mpany registered in the US, and part of a group of co mpanies engaged in consulting to mass -market
                 retailers and major supermarket chains in North A merica. The JV will market, sell and distribute Pimi Israel's Product
                 and Technology throughout the USA on an exclusive basis, and throughout Canada and Mexico on a non -exclusive
                 basis. Vegisafe shall seek Retailers and/or major Distributors in the US, who will reco mmend to its producer and/or
                 suppliers to produce and supply the Isopropyl (N-3 – Chlorophenyl) carbamate (CIPC) free potatoes or CIPC free
                 potato products. The exclusivity of the JV will be subject to fulfillment of certain milestones of annual sales. Pimi
                 Israel shall have 70% of the rights in the JV and Veg isafe will have 30% of the rights.
                 Vegisafe will invest in the JV an aggregate amount of US$250,000 wh ich will be used to cover expenses reflected in a
                 budget prepared for the JV and approved by Vegisafe and Pimi Israel. Any additional investment in excess of the
                 US$250,000 shall be contributed by the parties to the JV upon the mutual consent of the parties taking into account the
                 JV's business and needs and will be transferred to the Joint Venture as follows: 70% by Pimi Israel and 30% by
                 Vegisafe.

          E.     Agreement with Omex

                 In January 2009, Pimi Israel and Omex Agriculture Ltd. ("Omex"), a co mpany which is active in supplying agricultural
                 supplies to farmers in the UK, entered into an Exclusive Distribution Agreement, for a term of 5 years. Under this
                 agreement, Omex undertook to market, sell, d istribute and install systems and equipment required fo r the application
                 of Pimi Israel's Product in the UK. In case Omex does not achieve minimu m sales targets, then it might lose its
                 Exclusive distribution or even lose the rights for distribution in the UK.

NOTE 8    -      SHARE CAPITAL

          A.     Descripti on of the rights attached to the Shares in the Company

                 Each share of co mmon stock entitles the holder to one vote, either in person or by proxy, at meetings of shareholders.
                 The holders are not permitted to vote their shares cumulatively. Accordingly, the shareholders of our common stock
                 who hold, in the aggregate, more than fifty percent of the total voting rights can elect all of our d irectors and, in such
                 event, the holders of the remain ing minority shares will not be able to elect any of such directors. The vote of the
                 holders of a majority of the issued and outstanding shares of common stock entitled to vote thereon is sufficient to
                 authorize, affirm, ratify or consent to such act or action, except as otherwise provided by law.




                                                                F-17
                                 PIMI AGRO CLEANTECH, INC. AND ITS S UBS IDIARY
                                           (A Development Stage Company)

                          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)
         (Informati on as at March 31, 2009 and for the three months ended March 31, 2009 and 2008 is unaudi ted)



NOTE 8     -          SHARE CAPITAL (cont.)
          B.     Stock-option pl an of Pi mi Israel

                 In January 2008, Pimi Israel’s Board of Directors ( "Pimi Israel's Board ") approved a stock option plan for the grant,
                 without consideration (" Pimi Israel's plan "), o f up to 623,547 options (" Pimi Israel's Options "), exercisable into
                 623,548 ordinary shares of NIS 0.01 par value of Pimi Israel to emp loyees officers and directors of Pimi Israel. The
                 exercise price and vesting period for each grantee of Options will be determined by Pimi Israel's Board and specified in
                 such grantee's option agreement. The options will vest over a period of 1-16 quarters based on each grantee's option
                 agreements. Any option not exercised within 10 years after the date of grant thereof expires.
                 On the April 27, 2009, fo llo wing the acquisition of Pimi Israel, the Co mpany adopted the 2009 Share Incentive Plan
                 (the "2009 Share Incentive Plan"), pursuant to which the Co mpany's Board of Directors is authorized to g rant up to
                 3,000,000 options, exercisable into 3,000,000 shares of the Co mpany. The purpose of the 2009 Share Incentive Plan is
                 to offer an incentive to emp loyees, directors, officers, consultants, advisors, suppliers and any other person or entity
                 whose services are considered valuable to the Company, as well as to replace the Pimi Israel Plan.

                 Upon the adoption of the 2009 Share Incentive Plan, all options granted under the Pimi Isra el Plan were rep laced by
                 options subject to the 2009 Share Incentive Plan on a 1 for 1 basis (561,191 options were replaced).

                 As of December 31, 2008, 436,482 options out of Pimi Israel's plan have been granted to employees and 124,709
                 options to non-employees. As stated above, all such options were replaced to options of the Co mpany and are subject
                 to the 2009 Share Incentive Plan. (See D. and E. below). See also Note 15D.

                 The non-cash compensation relating to options granted to employees and direct ors was US$ 14,772 during the three
                 month period ended March 31, 2009 and US$ 42,579 during the period ended December 31, 2008 (of which
                 US$ 10,195 and US$ 30,169 was charged to research and development expenses and US$ 4,577 and US$ 12,410 was
                 charged to general and administrative expenses, respectively).

                 The remaining amount of approximately US$ 47,174 for the three month period ended March 31, 2009 and
                 US$ 61,946 for the year ended December 31, 2008, will be charged to the statements of operations in future periods
                 over the vesting period (14 quarters).

                 The fair value of options granted under the plan was estimated at the date of grant using the Black-Scholes option
                 pricing model. The following are the data and assumptions used:


            Div idend yield (%)                                                                                                   0
            Expected volatility (%) (*)                                                                                          50
            Risk free interest rate (%) (**)                                                                                      3
            Expected term of options (years) (***)                                                                              5-7
            Exercise price (US dollars)                                                                                  0.01/ 0.72
            Share price (US dollars)                                                                                      0.2/0.72
            Fair value (US dollars)                                                                                      0.19-0.26

                    (*)      Due to the fact that the Co mpany was a nonpublic entity, the expected volatility was based on the historic
                             volatility of public co mpanies which operate in the same industry sector (agricultural chemical industry).
                    (**)     The risk free interest rate represents the risk free rate of US$ zero – coupon US Govern ment Bonds.

                    (***)    Due to the fact that the Co mpany does not have historical exercise data, the expected term was determined
                             based on the "simplified method" in accordance with Staff Accounting Bulletin No. 110.
F-18
                                 PIMI AGRO CLEANTECH, INC. AND ITS S UBS IDIARY
                                           (A Development Stage Company)

                          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)
         (Informati on as at March 31, 2009 and for the three months ended March 31, 2009 and 2008 is unaudi ted)



NOTE 8     -           SHARE CAPITAL (cont.)
          B.     Stock-option pl an of Pi mi Israel (cont.)
                The following tables present a summary of the status of the grants to employees and directors as of March 31, 2009 and
                December 31, 2008:

                                                                                                                        Weighted
                                                                                                                        average
                                                                                                                        exercise
                                                                                                       Number             price
            Year ended December 31, (audited)                                                                    2008

            Balance outstanding at beginning of year                                                            -                  -
              Granted                                                                                     436,482               0.33
              Exercised                                                                                         -                  -
              Forfeited                                                                                         -                  -
            Balance outstanding at end of the year                                                        436,482               0.33

            Balance exercisable at the end of the year                                                     77,943               0.01


                                                                                                                        Weighted
                                                                                                                        average
                                                                                                                        exercise
                                                                                                       Number             price
            Three month period ended March 31, (unaudited)                                                       2009

            Balance outstanding at beginning of the period                                                436,482               0.33
              Granted                                                                                           -                  -
              Exercised                                                                                         -                  -
              Forfeited                                                                                         -                  -
            Balance outstanding at end of the period                                                      436,482               0.33

            Balance exercisable at the end of the period                                                  113,017               0.11


                  The aggregate intrinsic value of the balances outstanding and exercisable as of March 31, 2009 and December 31,
                  2008 is US$ 432,117 and US$ 172,168, respectively. This amount represents the total intrinsic value, based on Pimi
                  Israel's stock price of US$ 1.32 and US$ 0.72 as of March 31, 2009 and December 31, 2008, respectively, less the
                  weighted exercise price. This represents the potential amount received by the option holders had all option holders
                  exercised their options as of that date.



                                                             F-19
                                 PIMI AGRO CLEANTECH, INC. AND ITS S UBS IDIARY
                                           (A Development Stage Company)

                          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)
         (Informati on as at March 31, 2009 and for the three months ended March 31, 2009 and 2008 is unaudi ted)



NOTE 8     -          SHARE CAPITAL (cont.)
          B.     Stock-option pl an of Pi mi Israel (cont.)

                 The following tables summarize info rmation about options outstanding at March 31, 2009 and December 31, 2008:
                                                         Weighted
                                                          average            Weighted                               Weighted
               Range of         Outstandi ng at         remaining              average         Exercisable at        average
            exercise prices       March 31,           contractual life     exercise price        March 31,        exercise price
                 US$                  2009                 years                                    2009

                       0.01               311,773                  8.92                0.01              97,429                 0.01
                       0.72               124,709                  9.88                0.72              15,588                 0.72
                                          436,482                                                       113,017


                                                          Weighted
                                                           average            Weighted                                 Weighted
               Range of         Outstandi ng at          remaining             average          Exercisable at          average
            exercise prices     December 31,           contractual life     exercise price      December 31,         exercise price
                 US$                2008                    years                                   2008

                       0.01               311,773                  8.92               0.01                77,943                0.01
                       0.72               124,709                  9.88               0.72                     -                   -
                                          436,482                                                         77,943


          C.     Investor's Options of Pi mi Israel
                1.     Exercise of Existing Opti on in Pi mi Israel
                      During 2008, Pimi Israel issued 239,193 options with an exercise price of US$ 0.695 per option to several
                      investors, exercisable until June 2009 and issued 769,526 options with an average exercise price of US$ 0.695 per
                      option to several investors, exercisable until the end of February 2009.

                      During the months of January and February 2009, 201,972 options exercisable until February 2009 were exercised
                      into 201,972 Pimi Israel co mmon shares for a total amount of US$145,000 at an average price of US$0.721 per
                      share. All such shares were replaced during the acquisition of Pimi Israel by the Co mpany with shares of the
                      Co mpany and the remaining 567,554 options exercisable until February 2009 expired. The 239,193 options
                      exercisable until June 2009 were replaced with 239,193 options exercisable into shares of the Company at the
                      same exercise price and contractual life. Until June 30, 2009, the options were not exercised and therefore
                      expired.

                2.     Investments in Shares of Pi mi Israel
                      On January 20, 2009 an investment agreement was entered into between Pimi Israel and Earthbound LLC a
                      Limited Liability Co mpany registered in Delaware (" EB "). It was agreed that EB will invest the total sum of
                      US$300,000. The investment will be paid to Pimi Israel in tranches as follows: first tranche of US$60,000 will be
                      paid on March 15, 2009. The balance of US$240,000 will be paid in four installments as follows: US$60,000 on
                      June 15, 2009, US$90,000 on September 15, 2009 and US$90,000 on January 15, 2010. EB will receive the
                      allocated shares pro rata to the investment against each installment of the investment. At balance sheet date, EB
                      has invested the sum of US$60,000 and received 45,328 ord inary shares of Pimi Israel wh ich were exchange to
                      45,328 co mmon stock shares of the Company. See also Note 15B.
F-20
                          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)
         (Informati on as at March 31, 2009 and for the three months ended March 31, 2009 and 2008 is unaudi ted)

NOTE 8     -         SHARE CAPITAL (cont.)
          C.    Investor's Options of Pi mi Israel (cont.)
               2.    Investments in Shares of Pimi Israel (cont.)

                      On May 3, 2009, the Co mpany issued to Earthbound LLC a warrant for the purchase of 145,985 Co mmon Stock
                      shares at the price of US$1.37 per share to be exercised until June 15, 2009. On June 7, 2009, this date was
                      extended to July 31, 2009. The warrant has been granted to EB as a further incentive to EB to increase their
                      investment in the Co mpany and their involvement in its activit ies.

          D.     In December 2008, a member of the Advisory Board received options under the Plan as part of the compensation for
                 his services. Pimi Israel has granted the advisor a total amount of 31,177 options to be vested over a period of 8
                 quarters, each quarter 3,897 shares, provided the advisor will provide Pimi Israel consulting services for a period of
                 2 years. The exercise price shall be $0.72 per share.

                 The non-cash compensation relating to options granted to the consultant was US$ 4,065 and US$ 475 during the
                 periods ended March 31, 2009 and December 31, 2008, respectively.

                 As of March 31, 2009 and December 31, 2008, the fair value of the options that are subject to future consulting
                 services is US$ 22,701 and US$ 12,358, respectively.

          E.     In December 2008, a member of the Advisory Board received options under the Plan as part of the compensation for
                 his services. Pimi Israel has granted the advisor a total amount of 93,532 options to be vested over a period of 16
                 quarters, each quarter 5,846 options for shares, provided the advisor will provide Pimi Israel consulting services for a
                 period of 4 years. The exercise price shall be $0.72 per share.

                 The non-cash compensation relating to options granted to consultants was US$ 6,098 and US$ 713 during the periods
                 ended March 31, 2009 and December 31, 2008, respectively.

                 As of March 31, 2009 and December 31, 2008, the fair value of the options that are subject to future consulting
                 services is US$ 74,917 and US$ 3,570, respectively.




NOTE 9     -          RES EARCH AND DEV ELOPMENT EXPENS ES
                                                                                US doll ars
                                                                                                                        Cumulati ve
                                                                                                                        peri od from
                                                                                                                        January 14,
                                                                                                                        2004 (date of
                                                                                                                         inception)
                                            Three month period                                                              until
                                              ended March 31,                  Year ended December 31,                   March 31,
                                             2009          2008             2008         2007          2006                 2009
                                                (unaudi ted)                          (audited)                         (unaudi ted)
            Salaries and related
              expenses                        92,021          18,463        208,849           225,366       176,246            787,692
            Professional fees                 46,033          32,642        105,292            30,285        58,776            304,500
            Materials                          9,096           5,055         84,762            37,580        81,139            234,108
            Depreciat ion                      1,826           1,504          6,739             5,189         2,384             16,357
            Travel expenses                   24,435           4,957         52,959             8,210        34,507            142,135
            Vehicle maintenance                9,438          22,994         55,424            76,677        58,720            230,444
            Office maintenance and
              other                             9,003            895          31,634          26,956         40,232            119,941
                             191,852   86,510      545,659   410,263   452,004   1,835,177
Less:Grants fro m the OCS
        (*)                        -   (22,603 )         -         -         -    (121,753 )
                             191,852    63,907     515,154   319,015   452,004   1,713,424


     (*)      See Note 7A.




                                       F-21
                                 PIMI AGRO CLEANTECH, INC. AND ITS S UBS IDIARY
                                           (A Development Stage Company)


                           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)
          (Informati on as at March 31, 2009 and for the three months ended March 31, 2009 and 2008 is unaudi ted)



NOTE 10     -        GEN ERAL AND ADMINIS TRATIVE EXPENS ES
                                                                                US doll ars
                                                                                                                        Cumulati ve
                                                                                                                        peri od from
                                                                                                                        January 14,
                                                                                                                        2004 (date of
                                                                                                                         inception)
                                            Three month period                                                              until
                                             ended March 31,                   Year ended December 31,                   March 31,
                                             2009          2008             2008          2007         2006                 2009
                                                (unaudi ted)                           (audited)                        (unaudi ted)
             Salaries and related
             expenses                          10,185         18,891          93,378          120,953       107,838            332,353
             Professional fees                 21,590          9,071          81,230           60,052        21,674            198,724
             Vehicle maintenance                    -              -               -            2,349         2,225              4,574
             Depreciat ion                        159            131             586              577           325              1,677
             Office maintenance and
             other                                898              -          11,838            6,105        18,756             39,024
                                               32,832         28,093         187,032          190,036       150,818            576,352




NOTE 11     -        TAXES ON INCOME
           A.     Measurement of results for tax purposes under the Income Tax (Inflati onary Adjustments) Law, 1985 (the
                  “Inflationary Adjustment Law”)

                Until December 31, 2007, Pimi Israel reported for tax purposes in accordance with the provisions of the Inflationary
                Adjustments Law, whereby taxable inco me is measured in NIS, adjusted for changes in the Israeli Consumer Price
                Index.

                Results of operations for tax purposes are measured in terms o f earnings in NIS after adjustments for changes in the
                Israeli Consumer Price Index ("CPI"). Co mmencing January 1, 2008 this law is void and in its place there are transition
                provisions, whereby the results of operations for tax purposes are to be measured on a nominal basis.

           B.     Reduction in corporate tax rates

                  On July 25, 2005, the Israeli Parliament passed an amend ment to the Income Tax Ord inance (No. 147) – 2005,
                  gradually reducing the tax rate applicable to the Co mpany (regarding profits not eligib le for “approved enterprise”
                  benefits mentioned above) as follows: in 2006 – 31%, in 2007 – 29%, in 2008 – 27%, in 2009 – 26% and in 2010 and
                  thereafter – 25%.

           C.     Tax assessments

                  The Co mpany and Pimi Israel have not received final tax assessments since their inception.

           D.     Carryforward tax losses

                  As at March 31, 2009 and December 31, 2008, Pimi Israel has loss carry forward balances for inco me tax purposes of
                  US$ 1,986,133 and US$ 1,980,712, respectively, that are availab le to offset future taxable inco me, if any
F-22
                   .
                           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)
          (Informati on as at March 31, 2009 and for the three months ended March 31, 2009 and 2008 is unaudi ted)



NOTE 11     -        TAXES ON INCOME (cont.)
           E.     The following is reconciliation between the theoretical tax on pre-tax inco me, at the applicable Co mpany tax rate, and
                  the tax expense reported in the financial statements:

                                                                                           US doll ars
                                                            Three month period
                                                              ended March 31,                       Year ended December 31,
                                                             2009           2008                2008          2007          2006
                                                                (unaudi ted)                               (audited)
             Pretax loss                                     (219,428 )      (90,451 )          (602,994 )    (495,045 )    (585,181 )
             Federal tax rate                                      15 %           15 %                15 %           15 %         15 %
             Income tax co mputed at the ordinary tax
                 rate                                          32,914          13,568             90,449        74,257           87,777
             Non-deductible expenses                              (283 )         (316 )           (1,280 )      (1,200 )         (1,184 )
             Stock-based compensation                           (6,897 )            -            (11,817 )           -                -
             Tax in respect of differences in corporate
                 tax rates                                     24,137          10,854             72,359        69,306           85,769
             Losses and timing differences in respect of
                 which no deferred taxes were
                 generated                                     (49,871 )       (24,106 )        (149,711 )    (142,363 )       (172,362 )
                                                                     -               -                 -             -                -


           F.     Deferred taxes result principally fro m temporary differences in the recognition of certain revenue and expense items
                  for financial and inco me tax report ing purposes. Significant co mponents of the Group's future tax assets are as
                  follows:

                                                                                           US doll ars
                                                            Three month period
                                                             ended March 31,                       Year ended December 31,
                                                            2009            2008                2008         2007          2006
                                                                (unaudi ted)                              (audited)
             Co mposition of deferred tax assets:
             Provision for emp loyee related obligation        7,172            6,723              7,448        12,199                -
             Stock-based compensation                         18,021                -             11,147             -                -
             Non-capital loss carry forwards                 515,415          446,615            534,792       422,588          257,580
             Valuation allo wance                           (540,608 )       (453,338 )         (553,387 )    (434,787 )       (257,580 )
                                                                   -                -                  -             -                -




                                                               F-23
                                      PIMI AGRO CLEANTECH, INC. AND ITS S UBS IDIARY
                                                (A Development Stage Company)

                             NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)
            (Informati on as at March 31, 2009 and for the three months ended March 31, 2009 and 2008 is unaudi ted)

NOTE 12         -        EARNINGS (LOSS) PER S HARE
                The net income (loss) and the weighted average number of shares used in computing basic earnings (loss) per share for the
                three month periods ended March 31, 2009 and 2008, and for the years ended December 31, 2008, 2007 and 2006, are as
                follows:

                                                                                               US doll ars
                                                                  Three month period
                                                                    ended March 31,                   Year ended December 31,
                                                                   2009           2008             2008         2007          2006
                                                                      (unaudi ted)                           (audited)
                 Net inco me (loss)used for the computation
                      of basic loss per share generated from
                      continuing operation                         (219,428 )      (90,451 )       (602,994 )       (495,045 )       585,181

                 Net inco me (loss)used for the computation
                      of basic loss per share generated from
                      discontinued operation                              -              -                -          153,592        (246,234 )
                 Net loss                                          (219,428 )      (90,451 )       (602,994 )       (341,453 )      (831,415 )


                                                                                       Number of shares
                                                          Three month period ended
                                                                 March 31,                           Year ended December 31,
                                                            2009             2008                 2008           2007                2006
                                                                (unaudi ted)                                 (audited)
                 Weighted average number of shares
                    used in the computation of basic
                    earnings per share                         6,125,260        4,494,453         5,029,208         1,160,930         121,341


          (*)         The effect of the inclusion of options for the three month periods ended March 31, 2009 and 2008, and fo r the year
                      ended December 31, 2008 is anti-dilutive. In the years ended December 31, 2007 and 2006, there were no potential
                      shares outstanding.

NOTE 13          -        RELATED PARTIES
                A.    On July 12, 2004, Nir Ecology Ltd. ("Nir", a shareholder of the Company), and Machteshim Chemical Works Ltd.
                      ("Machteshim") entered into an agreement (the "Assignment Agreement"), under which Machteshim transferred to
                      Pimi Israel, all of its rights in the know-how and/or information relat ing to the product known as M C-10, which is the
                      previous name of the Pimi Israel's product SpuDefender (the "Product"). In addition, Machteshim transferred to Pimi
                      Israel all the rights in the patents and/or patent requests and/or licenses and/or documents related to the Product. Under
                      the Assignment Agreement, Machteshim undertook to register, at its own expense, all the rights in the patent and/or
                      patent request, relating to the Product, in the countries set out in an app endix to Assignment Agreement. If
                      Machteshim does not register the patents, it was agreed that Machteshim will t ransfer all the required documents to
                      Nir, or any party on its behalf, and Nir, or any party on its behalf, shall carry out the registration. Under an agreement
                      dated, November 11, 2005 between Nir and Pimi Israel, Nir declared and confirmed that the know-how and patents
                      and patent application and/or licenses relating to the Product which were transferred to Pimi Israel fro m Machteshim
                      under the Assignment Agreement (the "Intellectual Property") belong exclusively to Pimi Israel except for the right of
                      use of the Intellectual Property fo r water t reatment applications which was granted irrevocably and exclusively on a
                      world -wide basis to Nir or to its controlling shareholders (or any company in which Nir ’s controlling shareholders
                      have an interest). Nir undertook to sign all necessary documents for the completion of the assignment of the
                      Intellectual Property to Pimi Israel.
F-24
                                  PIMI AGRO CLEANTECH, INC. AND ITS S UBS IDIARY
                                            (A Development Stage Company)

                           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)
          (Informati on as at March 31, 2009 and for the three months ended March 31, 2009 and 2008 is unaudi ted)



NOTE 13     -        RELATED PARTIES
           A.     (cont.)
                Nir has been engaged in treat ment of Pimi Israel's patents and IP during the years 2006 -2008 and has incurred expenses
                related to such services. During 2008, Pimi Israel has agreed to pay to Nir for these services and in reimbursement of
                the expenses incurred by it a sum of NIS 100,000 (US$ 23,878). In 2009, Pimi Israel paid NIS 41,585 (US$ 9,930), and
                will pay Nir the balance of NIS 58,415 (US$ 13,948) when Pimi Israel raises funds of at least US$ 1,000,000. The
                consolidated financial statements as of December 31, 2008 include a provision in the sum of US$ 26,300.

           B.     Nir is the agent of the State of Israel for raw materials utilized by Pimi Israel in the formu lation of its products. During
                  the development stage of its formu lation, Pimi Israel imported to Israel the raw materials in order to formulate its
                  products. Under an agreement dated November 11, 2005, Pimi Israel purchased fro m Nir such raw materials at cost
                  plus a 10% handling commission. Under this agreement, Pimi Israel paid to Nir as handling co mmission amounts of
                  US$1,461, and US$1,699 in the years 2007 and 2006 respectively. Currently Pimi Israel does not produce the
                  formulat ion in Israel, and does not expect to purchase such raw materials fro m Nir in the future.

           C.     Nir and Pimi Israel share the same office space in Kibbutz Alonim, Israel. The office space was rented together by
                  Pimi Israel and Nir fro m Kibbutz Alonim under two separate lease agreements (see Note 7B). Nir provided office
                  services to Pimi Israel and paid the insurance premiu ms for the offices. Pimi Israel paid Nir for these services and
                  expenses (including IT, insurance, maintenance, office equip ment and supplies "the services") amounts of US$6,031
                  and US$3,498 in the years 2007 and 2006, respectively. As of 2009, Pimi Israel subleased to Nir 10 square meters of
                  office space, for US$ 75 per month.

           D.     Mr. Nimrod Ben Yehuda and Mr. Eitan Sh mueli (the controlling shareholder of Omdan Consulting and Instructions
                  Ltd. ("Omdan")), have guaranteed to Bank Hapoalim a line of credit of NIS 60,000 (US$ 14,327) extended to Pimi
                  Israel.

           E.     On April 1, 2005, M r. Nimrod Ben Yehuda guaranteed on behalf of Pimi Israel, certain obligations of Pimi Israel
                  under a lease agreement dated April 1, 2005 for Pimi Israel's offices with Kibbutz Alonim.

           F.     On December 12, 2007, Mr. Carmel guaranteed to Bank Leu mi a line of cred it of NIS 57,000 (US$ 13.610) extended
                  to Pimi Israel

           G.     On November 27, 2006, Pimi Israel entered into an Employ ment Agreement with its CEO whereby fro m December 1,
                  2007, the CEO was entitled to a total consideration of NIS 30,000 (US$ 7,163) plus VAT per month. According to the
                  amended emp loyment agreement of October 29, 2008, the CEO is entitled to a total consideration of NIS 50,000
                  (US$ 11,939) plus VAT per month as from the month of October 2008. This consideration is paid against a VAT
                  receipt and it covers all social benefits, car maintenance and cellular phone expenses of the CEO. The CEO undertook
                  to make the pay ments for social security, the pension fund and any other social insurance and benefits. Pimi Israel paid
                  the CEO the total amount of NIS 150,000 (US$ 36,989) in March 2009 (March 2008 – NIS 90,000 (US$ 25,321)) and
                  NIS 437,400 (US$119,715) in 2008 (2007 – NIS 30,000 (US$ 7,800)), as consideration under his employ ment
                  agreement.

                  In addition, the CEO is entitled to options under the Plan in the total amount of 311,773 options for 311,773 ord inary
                  shares to be vested over 16 quarters starting in December 2007 with 19,486 shares vesting each quarter. The exercise
                  price per each ord inary share is US$0.01.



                                                                 F-25
                                       PIMI AGRO CLEANTECH, INC. AND ITS S UBS IDIARY
                                                 (A Development Stage Company)


                               NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)
              (Informati on as at March 31, 2009 and for the three months ended March 31, 2009 and 2008 is unaudi ted)



NOTE 13   -      RELATED PARTIES (cont.)
               H.   According to an agreement dated November 13, 2005 and its 2 addendum dated November 16, 2006 and of April
                    28,2009, Mr. Ben Yehuda was appointed as Pimi Israel's CTO. The CTO is entitled to a monthly gross salary of NIS
                    25,000 (US$5,969), p lus executive insurance, education fund at the rate of 10% (7.5% contribution by Pimi Israel),
                    disability insurance at a rate not to exceed 2% with customary coverage, a fully paid rental car (including tax
                    assessment for private use), mobile phone expenses, a semi-annual bonus for sale targets (which were not met during
                    the reported periods).

                      The CTO received amounts of NIS 114,818 (US$ 28,313), NIS 133,174 (US$ 36,687), NIS 455,860 (US$119,900),
                      NIS 433,029 (US$112,592) and NIS 402,596 (US$95,289) as salaries and social benefits in the three month periods
                      ended March 31, 2009 and 2008 and for the years ended December 31, 2008, 2007 and 2006, respectively.

               I.     Pimi Israel entered into a Personal Serv ice Agreement in November 2008 with Mr. Avi Lifshitz, CPA (Isr.)
                      (hereinafter: the “CFO”). The CFO and Adwise Ltd. ("Adwise"), a co mpany under the control of the CFO, are entitled
                      to a total consideration of NIS 10,000 (US$2,630) plus VAT per month as fro m October 2008. According to the
                      service agreement, until the date on which Pimi Israel raises capital fro m external investors in an amount exceed ing
                      US$1,000,000, Pimi Israel shall pay the CFO and Adwise, on account of the consideration, and the remain ing amount
                      of NIS 5,000 (US$1,315) plus VAT, shall accrue to the credit of the CFO and Adwise and shall be paid to them after
                      the aforementioned influ x of capital. Pimi Israel paid the CFO and Adwise the total amount of NIS 30,000
                      (US$ 7,398) fo r the three month periods ended March 31, 2009 and NIS 30,000 (US$7,891), in 2008 as consideration
                      under the Personal Service Agreement.

                      In addition the CFO is entitled to options under the Plan under which he will be entit led to 62,355 options for 62,355
                      company shares to be vested over 16 quarters as of October 1, 2008, with 3,897 shares vesting each quarter. The
                      exercise price per o rdinary share is US$0.72.


               J.     Legal Services

                      The law firm of Sadot & Co., in which Mr. Eitan Sh mueli (a controlling shareholder of Omdan), is a partner, has a
                      retainer agreement with Pimi Israel and has received legal fees fro m Pimi Israel in amounts of NIS 30,000
                      (US$ 7,398), NIS 30,000 (US$ 8,264), NIS 91,142 (US$24,731), NIS 121,188 (US$29,500) and NIS 74,859
                      (US$16,798) in the three month periods ended March 31, 2009 and 2008 and in the years 2008, 2007 and 2006,
                      respectively.


NOTE 14   -     DISCONTINUED OPERATIONS
               A.   On April 30, 2007, Pimi Israel co mpleted the sale of its entire shareholding in Optiguide Hu midity Control Ltd.
                    (hereinafter: "Optiguide") Optiguide was engaged in development, assembly and marketing of humid ity control, and it
                    was acquired by Pimi Israel during December 2005 for no consideration. Optiguide met the definition of a co mponent
                    under SFAS 144. Accordingly, the results of operations of Optiguide have been classified as discontinued operations
                    in the statements of operations and prior period results have been reclassified accordingly.

                      As a result of this sale, Pimi Israel recognized during fiscal year 2007, a cap ital gain in an amount of US$245,574.



                                                                    F-26
                               NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (cont.)
              (Informati on as at March 31, 2009 and for the three months ended March 31, 2009 and 2008 is unaudi ted)



NOTE 14   -         DISCONTINUED OPERATIONS (cont.)
               B.     The following are the results of discontinued operations

                                                                                      US doll ars
                                                                                                                            Cumulati ve
                                                                                                                            peri od from
                                                                                                                            January 14,
                                                                                                                            2004 (date of
                                                                                                                             inception)
                                                 Three month period                                                         until March
                                                  ended March 31,                   Year ended December 31,                      31,
                                                  2009         2008              2008         2007          2006                2009
                                                    (unaudi ted)                            (audited)                       (unaudi ted)
                 Revenues                               -                 -           -        124,434       505,219               629,653
                 Cost of sales                          -                 -           -       (119,044 )    (286,872 )            (405,916 )
                   Gross profit                         -                 -           -          5,390       218,347               223,737
                 Marketing expenses                     -                 -           -        (42,962 )    (223,778 )            (266,740 )
                 General and administrative
                     expenses                             -               -            -        (52,993 )      (240,075 )         (280,760 )
                   Operating loss                         -               -            -        (90,565 )      (245,506 )         (323,763 )
                 Financing inco me, net                   -               -            -         (1,417 )          (728 )            (2,145 )
                                                          -               -            -        (91,982 )      (246,234 )          325,908
                 Capital gain on disposal                 -               -            -        245,574               -            245,574
                   Net loss                               -               -            -        153,592        (246,234 )          (80,334 )




NOTE 15         -        SUBS EQUENT EVENTS
               A.     In April 2009, the Co mpany issued under Regulation S Stock Purchase Agreement dated June 4, 2009 – 4,059
                      Co mmon Stock shares at $0.01 each, to an Israeli co mpany against payment of US$ 5,561 ($1.37 per 1 Co mmon Stock
                      share) which was received by the Co mpany.

               B.     On June 15, 2009, the Co mpany issued to Earthbound LLC (Parent Co mpany of Veg isafe), under the Term Sheet dated
                      January 20, 2009, with Pimi Israel, 45,328 Co mmon Stock shares at $0.01 each against payment of US$60,000 ($1.325
                      per 1 Co mmon Stock share) which was received by the Co mpany.

               C.     On June 15, 2009 the Co mpany issued under Regulation S Stock Pu rchase Agreement dated June 4, 2009 – 20,000
                      Co mmon Stock shares at $0.01 each to Mr. Youval Nachu m, an Israeli citizen, against payment of US$27,000 ($1.35
                      per 1 Co mmon Stock share) which was received by the Co mpany.

               D.     On June 15, 2009 the Co mpany issued under Regulation S Stock Pu rchase Agreement dated June 4, 2009 – 20,000
                      Co mmon Stock shares at $0.01 each to Mr. Ehud Nachu m, an Israeli cit izen, against payment of US$27,000 ($1.35 per
                      1 Co mmon Stock share) wh ich was received by the Co mpany.

               E.     On June 15, 2009, the Co mpany's board resolved to grant to its Director, M r. Rami Treger, 31,177 options for purchase
                      of the Co mpany's Common Stock shares under the Corporation Share Incentive Plan of 2009 for an exercise price of
                      $1.37. The vesting period is 8 quarters, commencing on July 1, 2009.


                                                                   F-27
                                                                     PART II

                                          INFORMATION NOT REQUIRED IN PROSPECTUS

Item 24. Indemni ficati on of Directors and Officers

Our Certificate of Incorporation provides to the fu llest extent permitted by Section 145 of the General Corporation Law of th e State of
Delaware that our directors or officers shall not be personally liab le to us or our shareholders for damages for breach of such direct or's or
officer's fiduciary duty. The effect of this provision of our Certificate of Incorporation is to eliminate our rights and o ur shareholders (through
shareholders' derivative suits on behalf of our co mpany) to recover damages against a director or officer for breach of the f iduciary duty of care
as a director or officer (including breaches resulting fro m negligent or grossly neg ligent behavior), except under certain situations defined by
statute. We believe that the indemnification provisions in our Articles of Incorporation are necessary to attract and retain qualified persons as
directors and officers.

Our By Laws also provide that the Board of Directors may also authorize us to indemnify our emp loyees or agents, and to advance the
reasonable expenses of such persons, to the same extent, fo llo wing the same determinations and upon the same conditions as ar e required fo r
the indemnificat ion of and advancement of expenses to our directors and officers. As of the date of this Registration Statement, the Board of
Directors has not extended indemn ification rights to persons other than directors and officers.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling
us pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchan g e Co mmission,
such indemn ification is against public policy as expressed in the Securit ies Act of 1933 and is, therefore, unenforceable.

Item 25. Other Expenses of Issuance and Distribution

The follo wing table sets forth an itemizat ion of all estimated expenses, all of which we will pay, in connection with the iss uance and
distribution of the securities being registered:


Nature of Expense                                                                                                                     Amount
SEC reg istration fee                                                                                                             $        30.56
Accounting fees and expenses                                                                                                      $       80,000
Legal fees and expenses                                                                                                           $      200,000

   TOTAL *                                                                                                                        $      280,030

* Estimated

Item 26. Recent Sales of Unregistered Securities
e following table discloses sales of unregistered securities sold by the Co mpany and by its subsidiary Pimi Israel in the pas t three years which
were not registered under the Securities Act.

Sales of securities by Pi mi Israel

During the quarter ended March 31, 2006, Pimi Israel issued an aggregate of 25,120 shares of common stock to three shareholde rs in
consideration for an aggregate amount of $189,000. Such shares were issued in connection with the Investment Agreement wit h Alon Carmel
and JNS Capital LLC dated November 13, 2005.

During the quarter ended September 30, 2006, Pimi Israel issued an aggregate of 24,000 shares of common stock to two shareholders in
consideration for an aggregate amount of $181,532. Such shares were issued in connection with the Investment Agreement wit h Alon Carmel
and JNS Capital LLC dated November 13, 2005.

During the quarter ended December 31, 2006, Pimi Israel issued an aggregate of 1,688 shares of common stock to one shareholde r in
consideration for an aggregate amount of $14,600 and 72,000 shares of preferred stock in consideration for an aggregate amount of $72,000.
Such shares were issued in connection with the Addendum to the Investment Agreement with Alon Carmel and JNS Capital LLC date d
November 15, 2006.

During the quarter ended June 30, 2007, Pimi Israel issued an aggregate of 53,996 shares of preferred stock to nine sharehold ers in
consideration for an aggregate amount of $149,587. Such shares were issued in connection with right issues to its existing s hareholders.
During the quarter ended September 30, 2007, Pimi Israel issued an aggregate of 1,743,910 shares of common stock to four shar eholders in
consideration for an aggregate amount of $82,508. Such shares were issued in connection with right issues to its existing shareholders.

During the quarter ended December 31, 2007, Pimi Israel issued an aggregate of 1,993,400 shares of common stock to eight shar eholders in
consideration for an aggregate amount of $27,738. Such shares were issued in connection with right issues to its existing shareholders.

During the quarter ended March 31, 2008, Pimi Israel issued an aggregate of 908,988 shares of common stock to six shareholder s in
consideration for an aggregate amount of $198,363. Such shares were issued in connection with investment made by one existing shareholder
and 5 new investors.

During the quarter ended June 30, 2008, Pimi Israel issued an aggregate of 334,370 shares of common stock to eleven sharehold ers in
consideration for an aggregate amount of $200,126. Such shares were issued in connection with investments made by such new investors.

During the quarter ended September 30, 2008, Pimi Israel issued an aggregate of 310,462 shares of common stock to seventeen s hareholders in
consideration for an aggregate amount of $219,266. Such shares were issued in connection with investments made by such new investors.

During the quarter ended December 31, 2008, Pimi Israel issued an aggregate of 307,018 shares of common stock to four shareho lders in
consideration for an aggregate amount of $327,988. Such shares were issued in connection with investments made by such new investors.

During the quarter ended March 31, 2009, Pimi Israel issued an aggregate of 277,472 shares of common stock to nine shareholde rs in
consideration for an aggregate amount of $245,000. Such shares were issued in connection with investments made by such new in vestors .
During the quarter ended June 30, 2008, Pimi Israel issued an aggregate of 4,508 shares of common stock to one shareholder in consideration
for an aggregate amount of $5,555. Such shares were issued in connection with investments made by such new investor.

On April 27, 2009, the shareholders of Pimi Israel entered into a Share Exchange transaction with the Co mpany, as discussed below in “Sales
of Securities by the Co mpany.”

Sales of Securities by the Company

On April 27, 2009, we purchased all the issued and outstanding shares of Pimi Israel fro m Pimi Israel’s shareholders in consideration for
6,313,589 shares of our Co mmon Stock (the “ Exchange Agreement"). As a result, Pimi Israel became a wholly -owned subsidiary of the
Co mpany. The shares owned by the Shareholders, who are all Israeli residents, were issued pursuant to Section 104B of the Israeli Tax
Ordinance (the “Tax Ordinance”). Pu rsuant to the Tax Ordinance, the shares were issued to and in the name of a trustee appointed by the
Co mpany (the “Trustee”). Moreover, the shares (and all related rights) shall be held by the Trustee in trust for the Shareholders who a re Israeli
residents for a period of 24 months following the granting of the Shares (the “Restricted Period”), during which period the Israeli residents
shall be entitled to sell a collective aggregate amount of 10% of their shares (i.e. 328,380 shares). T he Israeli resident's shareholders may
privately agree that any of them may be able sell more than 10% of their shares, provided the other shareholders agree to sell less than 10% of
their shares. Accordingly, the total amount of the shares sold by the Israeli resident's shareholders during the Restricted Period shall not exceed
10% of the aggregate shares held by these shareholders. The Israeli resident's shareholders have agreed that the Israeli resident's shareholders
listed on the Selling Shareholders table herein may sell the nu mber of shares included in this Prospectus. Under the Tax Ordinance, the
Co mpany is barred fro m selling the shares of Pimi Israel for a period of 24 months from the date of acquisition.

Pimi Israel’s 2008 Shares Option Plan (the "Pimi Israel Plan") was established as an incentive to retain Pimi's board of directors, employees
and consultants whose services are considered valuable. Subject to adjustments as provided in the Pimi Israel Plan, a total o f 623,547 Ord inary
Shares NIS 0.01 for each share of Pimi Israel (the “Shares”) were subject to the Pimi Israel Plan. As a result of Pimi’s acquisition of Pimi Israel
on April 27, 2009, the 561,191 options granted under the Pimi Israel Plan were exchanged for 561,191 options of Pimi pur suant to the 2009
Pimi Share Incentive Plan.

On June 15, 2009 we issued shares of Co mmon Stock to several investors:
 issued 45,328 shares of Co mmon Stock shares $0.01 each to Earthbound LLC, under the Term Sheet dated January 20, 2009, by and
     We
     between Pimi and Earthbound LLC, in consideration for payment of $60,000 US Dollars ($1.325 per 1 Co mmon stock share) which w ere
     received by the Co mpany.
 issued to Mr. Youval Nahu m, an Israeli cit izen, pursuant to a Stock Purchase Agreement dated June 4, 2009, 20,000 shares o f
     We
     Co mmon stock shares $0.01 each in consideration for pay ment of $27,000 US Do llars ($1.35 per 1 Co mmon stock share) which were
     received by the Co mpany. The issuance of these shares was made pursuant to Regulation S o f the Securities Act.
 issued to Mr. Ehud Nahu m, an Israeli cit izen, pursuant to a Stock Purchase Agreement dated June 4, 2009, 20,000 shares of Co mmon
     We
     stock shares $0.01 each in consideration for pay ment of $27,000 US Do llars ($1.35 per 1 Co mmon Stock share) which were received by
     the Co mpany. The issuance of these shares was made pursuant to Regulation S of the Securities Act
* Unless otherwise stated above, all o f the above offerings and sales were deemed to be exempt under rule 506 o f Regulatio n D and Section
4(2) of the securities Act of 1933, as amended. No advertising or general solicitation was employed in offering the securities. The offerings
and sales were made to a limited nu mber of persons, all of who m were accredited investors, business associates of Pimi or executive officers
of Pimi, and transfer was restricted by Pimi in accordance with the requirements of the Securities Act of 1933. In addit ion to representations
by     the     above-referenced      persons, we have made independent determinations above-referenced persons      were       accredited    or
sophisticated investors, and that they were capable of analy zing the merits and risks of their investment, and that they understood the
speculative nature of their investment.



                                                                      48
Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

Item 27. Exhi bits

Exhi bit
Number               Descripti on

3.1                  Articles of Incorporation of Pimi Agro Cleantech Ltd. (incorporated by reference to the Co mpany ’s registration on
                     Form S-1 filed with the Securities and Exchange Co mmission on May 5, 2009)

3.2                  Change of Name Certificate of Pimi Agro Cleantech Ltd. (incorporated by reference to the Co mpany ’s registration on
                     Form S-1 filed with the Securities and Exchange Co mmission on May 5, 2009)

3.3                  Cert ificate of Incorporation of Pimi Agro Cleantech, Inc. (incorporated by reference to the Co mpany ’s registration on
                     Form S-1 filed with the Securities and Exchange Co mmission on May 5, 2009)

3.4                  By-laws of Pimi Agro Cleantech Ltd. (incorporated by reference to the Company ’s registration on Form S-1 filed with
                     the Securities and Exchange Co mmission on May 5, 2009)

5.1                  Legality Op inion of Sichen zia Ross Fried man Ference LLP. (Filed herewith)

10.1                 Emp loy ment Agreement by and between Mr. Youval Saly and Pimi Agro Cleantech Ltd. dated November 27, 2006.
                     (incorporated by reference to the Co mpany’s registration on Form S-1/A filed with the Securities and Exchange
                     Co mmission on July 2, 2009)

10.2                 Addendum to the Emp loy ment Agreement with Mr. Youval Saly dated October 29, 2008. (incorporated by reference to
                     the Co mpany’s registration on Form S-1/A filed with the Securit ies and Exchange Co mmission on July 2, 2009)

10.3                 Emp loy ment Agreement with Mr. Nimrod Ben Yehuda dated November 13, 2005. (incorporated by reference to the
                     Co mpany’s registration on Form S-1/A filed with the Securities and Exchange Co mmission on July 2, 2009)

10.4                 Addendum to the Emp loy ment Agreement with Mr. Nimrod Ben Yehuda dated November 15, 2006 (incorporated by
                     reference to the Co mpany’s registration on Form S-1/A filed with the Securities and Exchange Co mmission on July 2,
                     2009)

10.5                 Addendum to the Emp loy ment agreement with Mr. Nimrod Ben Yehuda dated April 28, 2009. (incorporated by
                     reference to the Co mpany’s registration on Form S-1/A filed with the Securities and Exchange Co mmission on July 2,
                     2009)

10.6                 Agreement with Prof. Ilan Chet dated January 6, 2009 (incorporated by reference to the Co mpany ’s registration on
                     Form S-1/A filed with the Securities and Exchange Co mmission on July 2, 2009)

10.7                 Emp loy ment Agreement by and between Mr. Avi Lev i and Pimi Agro Cleantech Ltd. dated August 31, 2005.
                     (incorporated by reference to the Co mpany’s registration on Form S-1/A filed with the Securities and Exchange
                     Co mmission on July 2, 2009)

10.8                 Emp loy ment Agreement by and between Mr. Avi Lifshitz and Pimi Agro Cleantech Ltd. dated November 19, 2008
                     (Filed herewith)

10.9                 Pimi Agro Cleantech Ltd. 2008 Share Option Plan and option Agreements with : Mr. Youval Saly, Mr. Avi Lifshit z, M r.
                     Avi Lev i, M r. Doron Shorrer, Pro f. Avi Nach mias, Pro f. Ilan Chet . (incorporated by reference to the Co mpany ’s
                     registration on Form S-1/A filed with the Securities and Exchange Co mmission on July 2, 2009)

10.10                Agreement between Machteshim Chemical Works Ltd. and Nir Ecology Ltd. dated July 12, 2004. (incorporated by
                     reference to the Co mpany’s registration on Form S-1/A filed with the Securities and Exchange Co mmission on July 2,
                     2009)
10.11   Agreement between Nir Ecology Ltd. and Pimi Agro Cleantech Ltd both dated November 11, 2005. (incorporated by
        reference to the Co mpany’s registration on Form S-1/A filed with the Securities and Exchange Co mmission on July 2,
        2009)

10.12   Agreement between Nir Ecology Ltd. and Pimi Agro Cleantech Ltd both dated November 11, 2005. (incorporated by
        reference to the Co mpany’s registration on Form S-1/A filed with the Securities and Exchange Co mmission on July 2,
        2009)

10.13   Investment Agreement between Mr. Ben Yehuda, Omdan Consulting and Instruction Ltd., M r. Carmel and JNS
        Capital LLC dated November 13, 2005. (Filed herewith)

10.14   Addendum to the Investment Agreement between Mr. Ben Yehuda, Omdan Consulting and Instruction Ltd., M r.
        Carmel and JNS Capital LLC dated November 15, 2006 (incorporated by reference to the Co mpany ’s registration on
        Form S-1/A filed with the Securities and Exchange Co mmission on July 2, 2009)

10.15   Overseas Market Develop ment Consultancy Agreement by and between Pimi Agro Cleantech Ltd. and The Center for
        Potato Research in a Warm Climate dated January 9, 2008. (incorporated by reference to the Co mpany ’s registration on
        Form S-1/A filed with the Securities and Exchange Co mmission on July 2, 2009)

10.16   MOU between Pimi Agro Cleantech LTD. and Omn ivent Techniek BV dated May 19, 2008. (incorporated by reference
        to the Company’s registration on Form S-1/A filed with the Securities and Exchange Co mmission on July 2, 2009)

10.17   Agreement for Serv ices by and between Wagner Regulatory Associates, Inc. Pimi Agro Cleantech Ltd. dated September
        21, 2008 (incorporated by reference to the Co mpany’s registration on Form S-1/A filed with the Securities and
        Exchange Co mmission on July 2, 2009)

10.18   Tenancy Agreement between Kibbuts Alonim and Pimi Agro Cleantech Ltd dated December 30, 2008. (incorporated by
        reference to the Co mpany’s registration on Form S-1/A filed with the Securities and Exchange Co mmission on July 2,
        2009)

10.19   Agreement between Redebel S.A. and Pimi Cleantech Ltd. (Registration Assistance Agreement) dated December 23,
        2008. (incorporated by reference to the Co mpany’s registration on Form S-1/A filed with the Securities and Exchange
        Co mmission on July 2, 2009)

10.20   Agreement by and between Omex Agriculture Ltd. and Pimi Agro Cleantech Ltd. dated January 11, 2009. (incorporated
        by reference to the Co mpany’s registration on Form S-1/A filed with the Securities and Exchange Co mmission on July
        2, 2009)*

10.21   Letter of Intent Agreement by and between Veg iesafe LLC and Pimi Agro Cleantech Ltd. dated January 20, 2009 .
        (Filed herewith)

10.22   Term Sheet with Earthbound LLC dated January 20, 2009. (incorporated by reference to the Co mpany ’s registration on
        Form S-1/A filed with the Securities and Exchange Co mmission on July 2, 2009)

10.23   Vot ing Agreement between Alon Carmel, Omdan Consulting, and Instruction Ltd and Nir Ecology dated February 24,
        2009. (incorporated by reference to the Co mpany’s registration on Form S-1/A filed with the Securities and Exchange
        Co mmission on July 2, 2009)

10.24   Addendum to the Voting Agreement of February 24, 2009 dated April 23, 2009. (incorporated by reference to the
        Co mpany’s registration on Form S-1/A filed with the Securities and Exchange Co mmission on July 2, 2009)

10.25   Share Exchange Agreement between Pimi Agro Cleantech Inc., Pimi Agro Cleantech Ltd. and the Shareholders of Pimi
        Agro Cleantech Ltd., dated April 27, 2009. (incorporated by reference to the Co mpany ’s registration on Form S-1/A
        filed with the Securities and Exchange Co mmission on July 2, 2009)

10.26   Pimi Agro Cleantech, Inc. 2009 Stock Incentive Plan. (incorporated by reference to the Co mpany ’s registration on Form
        S-1/A filed with the Securities and Exchange Co mmission on July 2, 2009)

10.27   Warrant issued by Pimi Agro Cleantech, Inc. to Earthbound LLC dated May 3, 2009. (incorporated by reference to the
        Co mpany’s registration on Form S-1/A filed with the Securities and Exchange Co mmission on July 2, 2009)

10.28   Amend ment to Warrant issued by Pimi Agro Cleantech, Inc. to Earthbound LLC dated June 7, 2009. (incorporated by
        reference to the Co mpany’s registration on Form S-1/A filed with the Securities and Exchange Co mmission on July 2,
                      2009)
10.29                 Amend ment to Warrant issued by Pimi Agro Cleantech, Inc. to Earthbound LLC dated July 29, 2009. (filed herewith)

10.30                 Stock Purchase Agreement by and between Pimi Agro Cleantech, Inc. and Ehud Nahum dated June 4, 2009 (incorporated
                      by reference to the Co mpany’s registration on Form S-1/A filed with the Securities and Exchange Co mmission on July 2,
                      2009)

10.31                 Stock Purchase Agreement by and between Pimi Agro Cleantech, Inc. and Yuval Nahu m dated June 4, 2009
                      (incorporated by reference to the Co mpany’s registration on Form S-1/A filed with the Securities and Exchange
                      Co mmission on July 2, 2009)

21.1                  List of subsidiaries of the Co mpany. (incorporated by reference to the Co mpany ’s registration on Form S-1 filed with the
                      Securities and Exchange Co mmission on May 5, 2009)

23.1                  Consent of Fahn Kanne & Co .(filed herewith)

23.2                  Consent of Sichenzia Ross Fried man Ference LLP (included in Exh ibit 5.1) (filed herewith).

99.1                  Approval of Office of the Chief Scientist, Ministry of Industry, Trade and Labor, State of Israel, dated April 11, 2007.
                      (incorporated by reference to the Co mpany’s registration on Form S-1/A filed with the Securities and Exchange
                      Co mmission on July 2, 2009)

99.2                  Approval of Office of the Chief Scientist, Ministry of Industry, Trade and Labor, State of Israel, dated November 12,
                      2007. (incorporated by reference to the Co mpany’s registration on Form S-1 filed with the Securities and Exchange
                      Co mmission on May 5, 2009)

 *Portions of exh ibit 10.20 have been omitted pursuant to a request for confidential t reat ment filed separately with the Secur it ies and
Exchange Co mmission.


                                                                          49
Item 28. Undertakings

The undersigned Registrant hereby undertakes to:

(1) File, during any period in which offers or sales are being made, a post -effective amendment to this registration statement to:

(i) Include any prospectus required by Section 10(a)(3) of the Securit ies Act of 1933, as amended (the "Securities Act") arising after the
effective date of the registration statement (or the most recent post-effective amendment thereof);

(ii) Reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the inf ormation in the
registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of the
securities offered would not exceed that wh ich was registered) and any deviation fro m the low or high end of the estimated maximu m o ffering
range may be reflected in the form of prospectus filed with the Co mmission pursuant to Rule 424(b) under the Securities Act i f, in the
aggregate, the changes in volu me and price represent no more than a 20% change in the maxi mu m aggregate offering price set forth in the
"Calculat ion of Registration Fee" table in the effective reg istration statement; and

(iii) Include any additional or changed material informat ion on the plan of distribution.

(2) For determining liability under the Securities Act, treat each post-effective amend ment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the init ial bona fide offering.

(3) File a post-effective amend ment to remove fro m reg istration any of the securities that remain unsold at the end of the offering.

Insofar as indemnification for liabilit ies arising under the Securities Act may be permitted to directors, officers and contr olling persons of the
Co mpany pursuant to the foregoing provisions, or otherwise, the Co mpany has been advised that in the opinion of the Securities and Exchange
Co mmission such indemnificat ion is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

In the event that a claim for indemnification against such liabilit ies (other than the payment by the Co mpany of expenses incurred or paid b y a
director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is assert ed by such director,
officer or controlling person in connection with the securities being registered, the Co mpany will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate ju risdiction the question whether such indemnificatio n by it is against
public policy as exp ressed in the Securit ies Act and will be governed by the final ad judication of such issue.


Each prospectus filed pursuant to Rule 424(b) as part of a reg istration statement relat ing to an offering, other than registration statements
relying on Rule 430B or other than prospectuses filed in reliance on Ru le 430A , shall be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus
that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the re gistration statement
or prospectus that is part of the registration statement will, as to a purchaser with a t ime of contract of sale prior to such first u se, sup ersede or
modify any statement that was made in the registration statement or prospectus that was part of the registration statemen t or made in any such
document immed iately prior to such date of first use.

                                                                           50
                                                                 SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the reg istrant certifies that it has reasonable grounds to believe that it meets
all of the requirements of filing on Form S -1 and authorized this reg istration statement to be signed on its behalf by the undersigned, in Kibbutz
Alonim, Hutzot Alonim, Israel on August 3, 2009.

                                                                        PIMI CORPORATION

 August 3, 2009.                                                        By:      /s/ Youval Saly
                                                                                 Youval Saly
                                                                                 Chief Executive Officer
                                                                                 (Principal Executive Officer)

August 3, 2009.                                                         By:      /s/ Avi Lifshitz
                                                                                 Avi Lifshitz
                                                                                 Chief Financial Officer
                                                                                 (Principal Financial Officer and Principal
                                                                                 Accounting Officer)


                                                           POWER OF ATTORNEY


In accordance with the requirements of the Securities Act, this Registration Statement has been signed below by the following persons on
behalf of the Co mpany in the capacities and on the dates indicated.

                   Signature                                                  Title                                                Date


/s/ Youval Saly                                   Chief Executive Officer                                                     August 3, 2009.
Youval Saly                                       (Principal Executive Officer)

/s/ Avi Lifshitz                                  Chief Financial Officer                                                     August 3, 2009.
Avi Lifshitz                                      (Principal Financial Officer and Principal Accounting
                                                  Officer)

/s/ *                                             Chairman of the Board                                                       August 3, 2009.
Alon Carmel

/s/ *                                             Chief Technology Officer, Director                                          August 3, 2009.
Nimrod Ben-Yehuda

/s/ *                                             Director                                                                    August 3, 2009.
Doron Shorrer

/s/*                                              Director                                                                    August 3, 2009.
Rami Treger

* By: /s/ Youval Saly
Youval Saly
Attorney-in-Fact




                                                                        51
                                                                                                                                     Exhi bit 5.1

                                                 Sichenzia Ross Friedman Ference LLP
                                            61 BROADWAY, 32 nd FL. NEW YORK NY 10007
                                                 TEL 212 930 9700 FAX 212 930 9725




August 3, 2009

VIA ELECTRONIC TRANS MISSION

Securities and Exchange Co mmission
450 Fifth Street, N.W.
Washington, DC 20549



         RE:       Pimi Agro Cleantech Ltd.
                  A mendment to Form S-1 Registration Statement
                  File No. 333-158986



Ladies and Gentlemen :

We refer to the above-captioned registration statement on Form S-1/A (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Act"), filed by Pimi Agro Cleantech Inc., a Delaware corporation (the "Co mpany"), with the Securities and Exchange
Co mmission in connection with the registration of up to 405,703 shares of the Company's common stock.

We have examined the originals, photocopies, certified copies or other ev idence of such records of the Co mpany, certificates of officers of the
Co mpany and public officials, and other documents as we have deemed relevant and necessary as a basis for the opinion hereina fter
expressed. In such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as
certified copies or photocopies and the authenticity of the originals of such latter documents.

Based on our examination mentioned above, we are of the opinion that the securities being sold pursuant to the Registration Statement are duly
authorized, legally and validly issued and outstanding, fully paid and non -assessable under the laws of the State of Delaware, including
statutory provisions, all applicable provisions under the Delaware state constitution, and reported judicial decisions interpreting those laws.

We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement and to the reference to our firm under "Legal
Matters" in the related Prospectus. In giving the foregoing consent, we do not hereby admit that we are in the category of persons whose
consent is required under Section 7 of the Act, or the rules and regulations of the Securities and Exchange Co mmission.



                                                                  By:    /s/ SICHENZIA ROSS FRIEDMAN FERENCE LLP
                                                                         SICHENZIA ROSS FRIEDMAN FERENCE LLP
Exhi bit 10.13


                                                            AGREEMENT

This Share Purchase Agreement ( “Agreement” ) signed on 13 November , 2005 by and between Pimi Mari on Hol dings Ltd , (Co mpany
number 51-349712-3), incorporated in the State of Israel ( “ The Company” ) and Mr. Ni mrod Ben-Yehuda , I.D. 051795631 and
Omdan Consulting and Instructing LTD pri vate company no. 51-146831-6 , (jo intly and severally: the “Sharehol ders” ) fro m one
side, and Mr. Al on Carmel and JNS Capital LLC (jointly and severally : “ The Investors” ) fro m the other side.

                                                              RECITALS

Whereas           The parties have executed a term sheet pursuant to which they now wish to execute this Agreement, and;

Whereas           The Investors after having conducted due diligence of the Company business inter alia by experts, and after being involved
                  in the Co mpany business and activity (including trade show and negotiations) desire to invest in The Co mpany against the
                  issuance of The Co mpany’s Ordinary and Management shares in accordance with the terms set forth in this Agreement.



Now therefore the parties agree to the follo wing:

1.        DEFINITIONS AND EXHIB ITS

For the purpose of this Agreement, capitalized words shall have the meanings as specified belo w or as defined in other parts of this
Agreement.

“Business Plan” - Financial and non-financial targets that the Co mpany believes it can meet, on a quarterly basis in the years 2005, 2006
and 2007 – all of wh ich are incorporated in a document tit led the Business Plan which is attached to this agreement as Appendi x “A”.

“Investment” - A total of US $900,002 to be funded in quarterly installments as provided for in the Business Plan against the issuance of
120,000 Ordinary Shares of the Co mpany at the price of $7.50 per shares, and 2 Management Shares at the price of $1.00 each.

“The Loan Agreement” – the loan agreement dated February 7, 2005 and as amended on May 11, 2005 attached hereto as Appendix
“B” .

“The Loan” - Investors have previously made four loans to the Co mpany totaling $180,000 pursuant to The Loan Agreemen t.

“Intellectual Property” - The Patents and Patent applications described in Appendi x “ C” , as well as any and all related intellectual
property, including knowledge, technologies and know-how that have been developed, registered and/or accumulated by Mr. Nimrod
Ben-Yehuda, in relation to the Patents and Patents applications which Intellectual Property is currently owned by the Company or will be
transferred to the ownership of the Co mpany without any consideration – excluding rights to use and/or benefit fro m that portion of the
Intellectual Property that pertains to the exclusive purpose of water treat ment.

                                                                      1
2.     SALE AND TRANS FER OF SHARES / S IGNING AND CLOSING

2.1    SHARES

      Subject to the terms and conditions of this Agreement (including, without limitation, subject to the fu lfillment of the condi tions and
      obligations set out in Sections 2.3 and 2.4 belo w), at the Closing, The Co mpany shall issue and deliver the Investors the Shares, free
      and clear of all Encu mbrances, and The Investors will invest the investment sums in The Co mpany, as set out in Section 2.2 be low.

2.2    INVES TORS UNDERTAKINGS

          (a) The investment shall be in the total sum of US$ 900,002 (Nine hundred thousand and two US Dollars) (“ The Investment ”).

          (b) The Investment shall be satisfied as follows:


                  i) Pursuant to a previously signed Term Sheet, the Investors have increased their loan to the Co mpany to US $110,000 on
                     the same terms and conditions provided in the Loan Agreement dated February 7, 2005 and its addendum dated May 11,
                     2005.

                 ii) On August 23 2005, the Part ies have agreed to a new Business Plan, and therefore Investors have increased the loan to
                     the Co mpany to $140,000 on the same terms and conditions provided in the Loan Agreement dated February 7, 2005
                     and its addendum dated May 11, 2005.

                 iii) On October 2005 the Investors have made an additional loan to the Company in the sum of $40,000 on the same terms
                      and conditions provided in the Loan Agreement dated February 7, 2005 and its addendum dated May 11, 2005.

          (c) The investors shall convert any and all sums, which were furnished to the company as The Loan, to an investment to be
              deducted immediately fro m the funding obligations undertaken by Investors.

          (d) Pay to the Co mpany the sum of $2.00 for the 2 Management Shares at the price of $1.00 per Management Share.

          (e) Fund The Investment instalments according to the Business Plan. Each instalment shall be funded for the subsequent quarter,
              no later than 45 days prior to the end of each quarter, subject to clause 4.2(b) hereinafter.

          (f) In the event that the Co mpany exceeds the quarterly benchmarks provided in the Business Plan, Investors shall consider,
              favourably, the possibility to accelerate the funding of their Investment should Investors decide that such acceleration of
              funding assists the needs of the Co mpany.


                                                                     2
2.3 COMPANY UNDERTAKINGS

      (a) The Co mpany shall issue to The Investors 24,000 Ordinary Shares against the funding of the Investment pursuant to
          Paragraphs 2.2 (b)(a) and 2.2 (b)(b).

      (b) In addition, The Co mpany shall issue 96,000 Ord inary shares to an Escrow holder pu rsuant to the Escrow Clause set forth
          below.

      (c) The Co mpany shall issue 2 management shares to the Escrow holder pursuant to the Escrow Clause below.

      (d) Subsequently, Company will provide to The Investors financial reports as follo wing:

                i) Management-prepared monthly reports – no later than on the 20 th day of the subsequent month.

               ii) Auditor-reviewed reports – no later than on the 45 th day of the month subsequent to the end of each of the 1 st , 2 nd and
                   3 rd quarter o f the year.

               iii) Audited financial reports – no later than 120 days subsequent to the end of the year.

2.4 ES CROW CLAUS E


    (a) The parties shall appoint Advocate Yoel Levy of Twin Tower 1, 33 Jabotinsky st., Ramat Gan to act as escrow holder ( “Escrow
        Holder”). At the signing of this Agreement, the Company shall issue 96,000 ordinary shares of NIS 0.01par value each and two
        (2) management shares of NIS 1 par value each to the Escrow Holder. The Escrow Holder shall act in accordance with the
        following:


    (b) Escrow shall deliver to Investors the Ordinary Shares:

                  i) Upon notice from the Investors to Escrow, with a copy to the Company, of the funding of an instalment of the
                     Investment accompanied by a receipt from the Co mpany evidencing such instalment or a receipt evidencing a wire
                     transfer of such instalment to the Co mpany’s bank account Escrow shall deliver to Investors the number of shares
                     that, at the price of $7.50 per share, corresponds to the amount of the instalment.

                 ii) All the shares held by Escrow upon notice, by Investors, of a Material Breach by Co mpany, as defined hereinafter,
                     and against payment to Escrow, by Investors, of the sum representing NIS 0.01 per share mu lt iplied by the total
                     number of shares held by Escrow, which su m Escrow will then deliver to the Co mpany. The notice will be
                     accompanied by an affidavit of one of the Investors that all the terms of section 4.2(iii) (b) have been fulfilled.

    (c) Escrow shall deliver to Investors the 2 Management Shares held by Escrow as following:

                  i) One (1) Management Share shall be delivered to Investors upon notice fro m the Investors to Escrow, with a copy to
                     the Co mpany, that they have funded a total of $450,000 of the investment, accompanied by receipts fro m the
                     company and/or wire transfer receipts evidencing funding of the entire $450,000 less the sums provided in
                     Paragraphs 2.a and 2.b.

                                                                  3
                           ii) One (1) Management Share shall be delivered to Investors upon notice fro m the Investors to Escrow, with a copy to
                               the Co mpany, that they have completed the funding of their entire Investment obligation under the Investment
                               Agreement, acco mpanied by receipts fro m the company and/or wire transfer receipts evidencing funding of the
                               entire $900,000 less the sums provided in Paragraphs 2.a and 2.b.

                          iii) Upon receipt of notice fro m the Investors to Escrow, with a copy to the Company, of a Material Breach by
                               Co mpany, as defined hereinafter, acco mpanied by an affidavit of one of the Investors that all the terms of section
                               4.2(iii)(b) have been fulfilled.

         (d) In the event of a breach by the Investors, Escrow shall deliver all the Ordinary Sh ares and Management Shares then held by
             Escrow to the Co mpany.


2.5          Performances by Share Hol ders :

                 The holders of the 2 Management Shares not allocated to Investors shall support the creation by the Co mpany of an
                 Emp loyee Stock Option Plan and the allocation of 24,000 of the authorized ordinary shares to such plan.

2.6     SIGNING AND CLOS ING

                      Acts to be Performed Prior to the execution of this agreement:

       (a)        Immediately prior to the execution of this agreement, the Co mpany and the Shareholders will present to The Investors for
                  examination all the documents (“The Closing Documents"), as set out below:

                (1)        Resolutions of The Co mpany’s board of directors (“The Co mpany’s Board of Directors“) resolving (i) to approve the
                           execution of this Agreement; and (ii) to approve the issuing of t he shares pursuant to this Agreement and to authorize
                           the directors of The Co mpany to sign the appropriate documentation;

                (2)        Share allocation forms conforming with the art icles of association of The Co mpany, in respect of the shares, duly
                           executed by The Company and The Shareholders;



3.       REPRES ENTATIONS AND WARRANTIES.

The Co mpany and the Shareholders hereby represent and warrant, joint ly and severally, to The Investors the representations and warranties
set forth in Sections 3.1 through 3.6 (inclusive) (“ The Warranties “) and undertake that the Warranties are true and accurate in all
respects as of the agreement execution date, and acknowledge that The Investor has agreed to enter into this Agreement rely ing, inter alia ,
on the truth and accuracy of The Warranties. No representation or warranty of The Co mpany or the Shareholders in this Agreeme nt o mits
to state a material fact necessary to make the statements herein or therein, and is, in light of the circu mstances in which they were made,
not misleading. It is hereby clarified that the Investors have conducted due diligence of the Co mpany business, Know-How, and Patents by
their own experts, and has escorted the Company and took part in its activity since 1 st o f January 2005.

                                                                           4
3.1     SHARE CAPITAL, TITLE, ORGANIZATION, AUTHORITY, COMPLIANCE

3.1.1            Share Capi tal and Title

              The authorized share capital of The Co mpany consists of 9,999,600 ordinary shares of NIS 0.01 par value per share and 4
              management shares of NIS 1.00 par value per share, of which 120,000 ord inary shares and 2 management shares are issued
              and outstanding, and constitute all o f The Co mpany’s shares prior to the issuance of shares pursuant to this Agreement.
              The Shareholders are the registered owners and holders of all the issued shares, free and clear of all encu mbrances,
              including, without limitation any encumbrances to the benefit of any beneficiary owners. Mr. Nimrod Ben-Yehuda,
              through Ash-Dor Assets Management and Trusts Ltd is the owner of 75% of the Shares, co mprising 90,000 Ordinary
              Shares and 1 Management Share, and Mr. Eitan Sh mueli through Omdan Consulting and Instruction Ltd is the owner of
              25% of the Shares, co mprising 30,000 ordinary shares and 1 management share. No reference to any purported
              Encu mbrance appears upon any certificate representing the share capital of The Company. All of the outs tanding share
              capital of The Co mpany, has been duly authorized, valid ly issued and is fully paid -up and non-assessable. There are no
              options, warrants and/or any Contracts relating to the issuance, sale, or transfer of any shares or other securities of The
              Co mpany except for the obligation to eNit iatives under section 3.3.8(iii) of this Agreement. None of the outstanding shares
              or other securities of The Co mpany was issued in violation of the Israeli Co mpanies Law, 1999 or any other legal
              requirement. The shares shall, upon their issuance or transfer to The Investors, vest in The Co mpany, free of any
              encumbrances, and all rights (including voting rights, equity and all other rights) of shareholders in The Co mpany.

3.1.2            Subsi diaries

              The Co mpany does not own directly or indirect ly, nor is entitled and/or required to acquire, any shares or other securities
              of any Person pursuant to any Contract or otherwise, nor does The Company have any direct or indirect equity or
              ownership interest in any other business.

3.1.3            Organization and Good Standi ng

(a)     The Co mpany is a corporation duly organized, validly existing, and in good standing under the laws of Israel, with full corpo rate
        power and authority to conduct its business as it is now being conducted, to own, lease or use the assets that it purports to own, lease
        or use, and to perform all its obligations under Contracts..

(b)     The minute books, and records of The Company are comp lete, correct and up -to-date in all respects and have been maintained in
        accordance with sound business practices and applicable legal requirements. The minute books of The Co mpany contain accurate,
        complete and up-to-date records of all meetings held, and corporate action taken by the shareholders and the board of directors of The
        Co mpany, and no meeting of any such shareholders or board of directors has been held for which minutes have not been prepared and
        are not contained in such minute books. At the agreement execution, all of those books and records will be in the possession of The
        Co mpany.

                                                                      5
(c)       The Disclosure Letter ( Appendi x “D” ) contains complete copies of all Organizational Documents of The Co mpany as currently in
          effect. The copies of the Articles of Association of The Co mpany attached hereto as aforesaid, are co mplete, correct and up -to-date in
          all respects and have embodied in them or annexed thereto a copy of every shareholders ’ resolution amending the Article of
          Association in any way.

(d)       The Disclosure letter sets out the name of each bank in or with which t he Co mpany has had accounts, credit lines or safety deposit
          boxes, and the names of all persons presently authorized to draw thereon or having access thereto, and a brief description of each such
          account.

(e)       The Disclosure letter sets out the names of all persons now holding any power of attorney from The Co mpany and a summary of t he
          terms thereof.


3.1.4              Authority

                This Agreement (including all those agreements and documents, the execution of which is contemplated under this
                Agreement) have been, or will have been upon the execution of this Agreement, duly and validly executed by The
                Co mpany and/or the Shareholders and are, or as the case may be, will on Execution, constitute the legal, valid, and binding
                obligation of The Co mpany and the Shareholders, and such other parties, and enforceable against The Co mpany and
                Shareholders and such other parties in accordance with their terms. The Co mpany and the Shareholders have the absolute
                and unrestricted right, power, authority, and capacity to execute and deliver this Agreement and to perform their
                obligations under this Agreement.

3.1.5              Compliance with Legal or Contractual Requirements

(a)       Except as set forth in the Disclosure Letter ( Appendi x “ D ”), neither the execution and delivery of this Agreement nor the
          consummation or performance of any of the Contemp lated Transactions wil l, d irectly or indirectly (with or without notice or lapse of
          time):

        (i)      Contravene, conflict with, or result in a violation of (A) any provision of the Organizational Docu ments of The Company, or
                 (B) any resolution adopted by the board of directors or the shareholders of The Co mpany;

        (ii)     Contravene, conflict with, or result in a v iolation of: (A) any rights of any Person, or (B) any Contracts to which any of the
                 Shareholders are parties; or (C) any legal requirement or any Order to which The Co mpany or any Shareholder, or any of the
                 assets owned, leased or used by The Company, may be subject; or entitle any Govern mental Body or other person to challenge
                 any of the contemplated transactions or to exercise any remedy or obtain any relief under any legal requirement or any Order
                 as aforesaid;


                                                                         6
      (iii)         Contravene, conflict with, or result in a v iolation of any of the terms or requirements of, or result in any Govern mental Bod y
                    revoking, withdrawing, suspending canceling, terminating, or modifying, any Govern mental Authorization held by The
                    Co mpany, relating to the business of, or any of the assets owned, leased or used by, The Co mpany;

      (iv)          Cause the Co mpany to become subject to, or to become liable for the pay ment of, any Tax;

  (v)           Cause any of the assets owned by The Co mpany to be reassessed or revalued by any taxing authority or other Govern mental Bo dy;

      (vi)          Contravene, conflict with, or result in a vio lation or breach of, or entitle any Person to declare a default or exercise any remed y
                    under, or to accelerate the maturity or performance of, o r to cancel, terminate, or modify, any Contract and/or any provisio n
                    thereof;

      (vii)         Relieve any Person of any obligation to The Co mpany (whether contractual or otherwise) or entitle any Person to terminate an y
                    obligation, right or benefit (whether contractual or otherwise) enjoyed by The Co mp any;

      (viii)        Result in the imposition or creation of any encu mbrance upon or with respect to any of the assets owned, leased or used by Th e
                    Co mpany; or

      (ix)          Cause any officer o r key employee of The Co mpany to leave their emp loy ment.

(b)            Except as set forth in the Disclosure Letter ( Appendix “ D” ), The Co mpany nor any of the Shareholders are and will not be required
               to give any notice to, or obtain any consent, approval, ratification, waiver or other authorization (including, without limit at ion, any
               governmental authorization) fro m any person in connection with the execution and delivery of this Agreement or the consummat ion
               or performance of any of the contemplated transactions.

(c)            All returns, particulars, resolutions, and documents required by the Israeli Co mpanies Law, 1999 or any other legislat ion to be filed
               with the Israeli Reg istrar of Co mpanies or with any other Govern mental Body, have been duly filed.

3.2            FINANCIAL STATEMENTS AND ASS ETS

3.2.1                   Proper Accounting and Compli ance with Israeli Generally Accepted Accounti ng Princi ples

                     The books of account and all records of the Co mpany are or will be co mplete, correct and up -to-date and have been
                     maintained in accordance with sound business practices, and generally accepted accounting principles in Israel (” Israeli
                     GAAP “), including the maintenance of an adequate system of internal controls.

                                                                              7
3.2.2               Balance Sheets and Profit and Loss Statements

(a)       General

        (i)      The Co mpany has delivered to The Investors:

                    (1) The unaudited trial balance of The Co mpany as of August 31, 2005 and the related profit and loss statements
                        (hereinafter the “Financial Statements").


                (ii) The Financial Statements (A) conform to the books and records of The Co mpany in all material respects; (B) present a true,
               complete and correct view of the financial condition and the results of operations, changes in shareholders' equity, and cash flo w
               of The Co mpany as at the respective dates of and for the periods referred to therein, all in accordance with Israeli GAA P; (C)
               reflect the consistent application of Israeli GAAP throughout the periods involved. No financial statements of any Person oth er
               than The Company are required by Israeli GAAP to be included in the financial statements of The Co mpany.


               (iii) To the best of the Co mpany’s and the Shareholders knowledge and of the knowledge of the officers of The Co mpany, a s of
               the date of the execution of this Agreement, there are no facts or circumstances which are material in relat ion to the assets ,
               business or financial condition of The Co mpany which do not appear fro m the Financial Statements and/or which have not been
               fully and fairly d isclosed in the Disclosure Letter ( Appendi x “D” ).



( b)      Without prejudice to and notwi thstanding the generality of the above Section 3.2.2(a):

(b1)      Title to Assets

        The Co mpany owns, leases or has the legal right to use all assets used in the operation of its business and has good and market able tit le
        to, or in the case of leased assets, valid leases in respect of, all the assets: (i (i) purchased or ot herwise acquired by The Co mp any since
        its organization, wh ich assets purchased or acquired as aforesaid (other than inventory and short -term investments) are listed in the
        Disclosure Letter ( Appendi x “D” ). A ll the assets owned, leased or used by The Co mpany as aforesaid are free and clear of all
        Encu mbrances and are not subject to any limitations of any nature, save as set out in the Disclosure Letter ( Appendi x “D” ).

(b2)      Conditi on And Sufficiency Of Assets

        The Co mpany owns, leases, or has the legal right to use all the assets that it needs in order to continue to run its business after the
        execution of this agreement in the same manner as it has during the 12 (twelve) months preceding that dat e .

        The equipment of The Co mpany is structurally sound, in good operating condition and repair, and does not require any maintena nce or
        repairs, except for routine maintenance and repairs, in the ordinary course of business, that are not material in nature or cost.


                                                                          8
       Without derogating from any other provision in this Agreement, it is recorded that all office space (including shared storage
       space) occupied by The Company is valid ly leased by The Company fro m Kibutz A lonim being registered owner thereof,
       pursuant to a lease agreement dated 1/4/2005, which is in full force and effect. The said Buildings are in good repair and fit for
       the purposes for which they are used, and there is no material defect in the condition thereof, and the said Buildings comp ly with
       all required planning and building permits. Save for the said office space, The Company does not own, lease, occupy or use any
       other immovable property in connection with its business.

(b3)   Accounts receivable

       All accounts receivable of The Co mpany reflected in the Financial Statements and in the accounting records of The Company as
       of the date of this agreement execution (collectively, the "Accounts receivable") represent valid obligations arising from sa les
       actually made or services actually perfo rmed in the ordinary course of business. Unless paid prior to the execution date, the
       Accounts receivable are, or will be, as of the execution date current and collectib le net of the respective reserves shown on the
       Financial Statements, respectively, or in the accounting records of The Company as of the execution date (which reserves are
       adequate and calculated consistent with the practice used for the year 2004 and, in the case of the reserve as of the execution date,
       will not represent a greater percentage of the Accounts receivable as of the execution date than the reserve reflected in the 2004
       Balance Sheet in respect of the Accounts receivable reflected therein and will not represent a Material Adverse Change in th e
       composition of such Accounts receivable in terms of aging). Subject to such reserves, each of the Accounts receivable either has
       been or will be collected in fu ll, without any set-off, within ninety days after the day on which it first becomes due and payable.
       There is no contest, claim, or right of set-off, other than returns in the ordinary course of business, under any Contract with any
       obligor of an Accounts receivable relat ing to the amount or validity of such Accounts receivable. The Disclosure Lett er (
       Appendi x “D” ) contains a complete and accurate list of all Accounts receivable as of 31.8.2005. .

 (b4 ) Inventory

       All inventory of The Company, whether or not reflected in the Financial Statements, respectively, is in go od and undamaged
       condition, and consists of a quality and quantity usable and salable in the ordinary course of business, except for obsolete items
       and items of below-standard quality, all of wh ich have been written off or written down to net realizable va lue in the Financial
       Statements, respectively, or in the accounting records of The Company as of the execution date, as the case may be. All
       inventories not written off have been priced at the lower of cost or net realizab le value. The quantities of each item of inventory
       (whether raw materials, work-in-process, or finished goods) are not excessive, but are reasonable in the present circumstances of
       The Co mpany.

(b5)    Intellectual Property

                       (b5/1) Know-How Necessary for the Business


                                                                      9
       (i)      Except as set forth in the Disclosure Letter ( Appendi x “D” ), The Co mpany is the owner of all right, tit le, and interest in and
                to each of the Intellectual Property Assets, whether or not reflected in the Financial Statements, necessary for the operation of
                its business as it is currently conducted and/or as reflected in the business plan given to The Investors, and such right, title, and
                interest is free and clear of all encumbrances, and other adverse claims, and has the right to use all such Intellectual Property
                Assets, without payment to, or the consent of any third party.

       (ii)     Except as set forth in the Disclosure Letter ( Appendix “D” ), all former and current employees of The Co mpany have
                executed written Contracts with The Co mpany that assign without compensation to The Co mpany all rights to any inventions,
                improvements, discoveries, or informat ion relating to the business of The Company, if and to the extent that such assignment
                is not effected by operation of law under the law applicab le to such Contract. No employee of The Company has entered into
                any Contract that requires the employee to transfer, assign, or disclose informat ion concerning his work to anyone other than
                The Co mpany.

       (b/5.2) Patents and Trademarks

       (i)      The Co mpany has registered patents, trademarks and/or is in the process of registering patents as detailed in Appendi x “ C” .



       (b5/3) Trade Secrets

       (i)      The Shareholders and The Co mpany have taken all reasonable precautions to protect the confidentiality of their Trade Secrets.

       (ii)     The Co mpany has good title and an absolute (but not necessarily exclusive) right to use the Trade Secrets. The Trade Secrets
                are not part of the public knowledge or literature, and, to Shareholder ’s knowledge, have not been used, divulged, or
                appropriated either for the benefit of any Person (other than to The Co mpany) or to the detriment of The Co mpany. No Trade
                Secret is subject to any adverse claim or has been challenged or threatened in any way.

(b6)     Tax and Social Security Contributions

       (a)      The Co mpany has filed or caused to be filed (on a timely basis since its incorporation) all Tax Returns and all Social Security
                Returns that are or were required to be filed by or with respect to The Company, pursuant to applicable legal requirements, an d
                all such Tax Returns and Social Security Returns filed by The Co mpany are true, correct, and co mplete, and there is no tax or
                social security sharing agreement that will require any payment by The Co mpany after the execution date The Disclosure
                Letter ( Appendi x “D” ) contains a comp lete and accurate list of, all such Tax and of all such Social Security Returns filed
                since its organization.

       (b)      The Co mpany has fully and on a timely basis paid, or made full p rovision for the pay ment of, all Taxes and all Social Securit y
                Contributions that have become due, except such Taxes and/or Social Securities Contrib utions, if any, as are listed in the
                Disclosure Letter ( Appendix “ D” ) and are being contested in good faith and as to which adequate reserves have been
                provided in the Financial Statements. The charges, accruals, and reserves with respect to Taxes and So cial Security
                Contributions in The Co mpany’s books are adequate (determined in accordance with Israeli GAAP) and are at least equal to
                The Co mpany's liab ility for Taxes and Social Security Contributions. There exists no proposed Tax or Social Security
                Contribution assessment against The Co mpany except as d isclosed in the Financial Statements, respectively, o r in the
                Disclosure Letter ( Appendi x “D” ). A ll Taxes and/or Social Security Contributions that The Company is or was required by
                legal requirements to withhold or collect have been duly withheld or collected and, to the extent required, have been paid to
                the proper Govern mental Body or other Person.


                                                                        10
              To the best of the Shareholders ’ knowledge, no facts exist that could constitute grounds for the assessment of any material
              liab ility for Taxes and/or Social Security Contributions by any Govern mental Body with respect to The Company. The
              Co mpany has taken all steps reasonably required by it to be taken prior to the execution date, in order to obtain any Tax
              credits, or other Tax benefits, whether available in respect of the period prior to or after the execution date.

(b7)     Employee Compensations

       (a)     The Disclosure Letter ( Appendi x “D” ) contains a co mplete and accurate list of the fo llo wing informat ion for each emp loyee
               or director of The Co mpany, including each employee on leave of absence or layoff status:

             (i)      Emp loyee name, job tit le, material terms of employ ment, (including, without limitation, particu lars regard ing, salary,
                      lin kage of salary, annual vacation, accrued vacation, Supplementary Education Fund ( Keren Hishtalmut ), sick pay,
                      pension fund and provident fund or manager’s insurance, travel allowances), any agreements or promises, whether
                      written or oral, regarding current or future profit -sharing, cash, shares or other bonus entitlements, fringe benefits,
                      severance pay, retirement pay, accrued vacation pay, any change in compensation since January 1, 2005;

             (ii)     Service credited for purposes of vesting and elig ibility to participate under The Co mpany's pension, retirement,
                      profit-sharing, thrift -savings, deferred co mpensation, share bonus, share option, cash bonus, emp loyee share ownership
                      (including investment credit or payroll share ownership), severance pay, insurance, med ical, welfare, or vacation plan.

             (b) Except as disclosed in article 3.2.2 (b7) The pay ments by The Co mpany to pension and provident funds (including, without
             limitat ion, manager’s insurance), together with the relevant reserves reflected in the Financial Statements, respectively, fully
             cover the liability of The Co mpany under law or under any co llective agreement, individual emp loy ment agreement, or other
             emp loyment agreement o r arrangement with respect to its employees and directors as at the dates of the aforesaid balance sheets
             for pension, severance pay, vacation pay and similar Liabilit ies, and The Company has continued to make all current payments
             to such pension and provident funds (including, manager’s insurance) until the execution date. All of the employees and
             directors shall have been paid all amounts owing to them by The Co mpany, and all amounts deductible fro m The Co mpany ’s
             emp loyees shall have been duly deducted, as at the execution date. To the best of the Shareholders knowledge, there are no
             outstanding claims against The Co mpany by any of its employees and/or directors.

                                                                      11
        (c)      Except as disclosed in Part 3.2.2(b7) or in the Employ ment Agreements referred to in Sect ion 2.3(ii) (5) of th is Agreement,
                 there exist no agreements or promises between The Company and any of its employees or directors, whether written or oral,
                 with respect to any change in compensation, current or future profit -sharing, cash, shares or other bonus entitlements, fringe
                 benefits, severance pay, retirement pay, accrued vacation pay, vacation accrued, and no service credited for purposes of
                 vesting and eligibility to part icipate under The Co mpany's pension, retirement, profit -sharing, thrift-savings, deferred
                 compensation, share bonus, share option, cash bonus, emp loyee share ownership (including investment cred it or payroll share
                 ownership), severance pay, insurance, medical, welfare, or vacation plan.


3.3      NO LIAB ILITIES

3.3.1              General

                Except as set forth in any Part of the Disclosure Letter ( Appendi x “­D” ) The Co mpany has no Liab ilities or obligations
                of any nature whatsoever except for Liabilit ies or obligations reflected or reserved against in the Financial Statements, and
                Liabilities incurred in the ordinary course of business since it organization.

                In particular and without derogating from the generality of the foregoing, the fo llo wing is represented and warranted:

3.3.2              Compliance with Legal Requirements

                Except as set forth the Disclosure Letter ( Appendix “­D” ), The Co mpany is, and at all times since its incorporation has
                been, in full co mpliance with each legal requirement that is or was applicab le to it or to the conduct or operation of its
                business or the ownership or use of any of its assets. To the best of the Co mpa ny knowledge, no event has occurred, act
                been performed or o mission omitted which may result after the execution date in violation by The Company of any of the
                laws referred to in this Section or in the incurring by The Co mpany of any Liability or cost in connection therewith.

3.3.3              Contracts: No Defaults

                Except as set forth the Disclosure Letter ( Appendi x “­D” ):

(a)       no officer, director, agent, e mp loyee, consultant, or contractor of The Co mpany is bound by any Contract that purports to limit or
          which adversely affects or will affect (i) the ability of such individual or of The Co mpany to engage in or continue any cond uct,
          activity, or pract ice relating to the business of The Co mpany, or (ii) the ability of such individual to assign to The Co mpany any rights
          to any invention, imp rovement, d iscovery or other Intellectual Property Assets.

                                                                         12
(b)        Each Contract is in full force and effect and is legal, valid and enforceable in accordance with its terms, and shall continu e in full
           force and effect (and not be subject to termination by the counterparty theret o), notwithstanding the consummat ion of the transactions
           contemplated by this Agreement, and is, and has been, fully co mp lied with by all of the parties thereto. None of the parties to any
           Contract is in breach or default thereof and no event has occurred or circu mstance exists that may result in a v iolation or breach of any
           Contract, or give any party to such Contract the right to declare a default or an acceleration of maturity or performance, or to exercise
           any remedy.

(c)        There are no renegotiations of, or outstanding rights to renegotiate any material amounts paid or payable to The Company unde r
           current or co mpleted Contracts with any Person and no such Person has made oral or written demand for such renegotiation.

3.3.4                Empl oyees

(a)        No director, officer, or other key employee of The Co mpany intends to terminate its emp loyment with The Co mpany.

(b)        The Disclosure Letter ( Appendix “­D” ) contains a complete and accurate list of the following in formation for each ret ired employee
           or director of The Co mpany, or their dependents, receiving benefits or scheduled to receive benefits in the future: Name, pension
           benefit, retiree med ical insurance coverage, retiree life insurance coverage, and other benefits.

         Except as disclosed in the Disclosure Letter ( Appendix “­D” ), such retired employees or directors, or their dependents, will not
         receive or are not scheduled to receive any pension benefits, retiree med ical insurance coverage, retiree life insurance cove rage, and
         other benefits.

3.3.5                Insurance

        (i) All policies set out in the Disclosure Letter ( Appendi x “­D” ) wh ich are held by The Company or that provide coverage to any
            Shareholder, The Co mpany or any director o r officer of The Co mpany: (i) are valid, outstanding, and enforc eable, (ii) are issued by an
            insurer that is reputable to be financially sound, and (iii) taken together, provide adequate insurance coverage for the asse ts and the
            operations of The Company, (iv) are sufficient for co mpliance with all legal requirements a nd Contracts to which The Company is a
            party or by which any of them is bound, (v) will continue in full force and effect fo llo wing the consummat ion of the Contemp l ated
            Transactions, and (vi) do not provide for any retrospective premiu m adjustment or other experienced-based liability on the part of The
            Co mpany.

      (ii) None of the Shareholders nor The Co mpany has received (i) any refusal of coverage or any notice that a defense will be affo rd ed with
           reservation of rights, or (ii) any notice of cancellat ion or any other indication that any insurance policy is no longer in full force or
           effect or will not be renewed or that the issuer of any policy is not willing or able to perform its obligations.

                                                                          13
    (iii) The Co mpany has punctually paid all respective premiu ms due, and has otherwise performed all of its obligations, under each p olicy
          to which it is a party or that provides coverage to it or to any director thereof.

    (iv) The Co mpany has given timely notice to the insurer of all claims that may be insured thereby.

    (v) The Shareholders are not aware of the occurrence of any act or o mission, which could invalidate or impair such insurance.

3.3.6                Environmental Matters

Without derogating fro m the provisions of Section 3.3.1 above, except as set forth in the Disclosure Letter ( Appendix “­D” ), The
Co mpany is, and at all t imes has been, in fu ll co mpliance with, and has not been and is not in violation of or has Liability or potential
Liability under, any legal requirement relating to environ mental protection, occupational, health and safety and similar laws .

3.3.7                Labor Relati ons; Compliance

Except as set forth in The Disclosure Letter ( Appendi x “­D” ):

        (i) There has not been, nor is there presently pending or existing, nor Threatened, any Proceeding against or affecting The Compa ny
            relating to the alleged violation of any legal requirement pertaining to labor relations or emp loyment matters. No event has occurred
            nor circu mstance exists that could provide the basis for any labor dispute.

    (ii) The Co mpany has complied in all respects with all legal requirements relating to employ ment, equal employ ment opportunity,
         nondiscrimination, immigration, wages, hours, benefits, collective bargaining, Occupational Safety and Health, and plant clos in g.

3.3.8                Certain Payments / Finder's Fees

        (i) Except as disclosed in the Disclosure Letter ( Appendix “­D” ): neither The Co mpany, nor any director, officer, agent, emp loyee of
            The Co mpany, nor any other Person associated with or acting for or on behalf of any Co mpany, has directly or indirectly (i) made any
            bribe, payoff, kickback, or other pay ment to any Person, private or public, regardless of form, whether in money, p roperty, o r services
            to obtain or reward special concessions, or favorable treatment in securing business for or in respect of The Company or in violatio n
            of any legal requirement, (ii) established or maintained any fund or asset that has not been recorded in the books and record s of The
            Co mpany.

    (ii) Upon execution of the Investment the Co mpany shall pay to eNitiat ives – New Business Architects Ltd. (“eNitiat ives”), wit hin 30
         days of the Investment Agreement, the sum of $18,000 plus VAT as consideration for eNit iatives ’ work done to facilit ate the
         Investment.

    (iii) eNit iatives shall have the right to receive from The Co mpany and The Company shall have the right to deliver to eNit iatives, 1,200
          Ordinary Shares at a value of $7.50 per share, in lieu of 50% of the pay ment provided, in which case The Co mpany shall only pay to
          eNit iatives the sum of $9,000 in addit ion to the delivery of the shares plus VAT on the entire value, the transaction to take place
          within 30 days of the execution of this Agreement.

                                                                          14
      (iv) The holders of the 2 Management Shares not held by Investors shall vote in support of Investors ’ Management Shares regarding
           emp loyment of eNitiatives and/or Mr. Reuven Marko, which emp loy ment shall be covered in a separate agreement.



3.4           NO PENDING OR THREATEN ED PROCEEDINGS

              Except as set forth in the Disclosure Letter ( Appendi x “­D” ):

         (a)         There is no pending Proceeding:

         (i)         That has been commenced by or against The Co mpany or that otherwise relates to or may affect the business of, or any of the
                     assets owned, leased or used by, The Co mpany; or

         (ii)        That challenges, or that may have the effect of preventing, delaying, making illegal, or otherwise interfering with, any of the
                     Contemp lated Transactions; or

      (iii)      That Threatens to subject any officer, d irector, agent, or emp loyee of The Co mpany or any of its Subsidiaries to any Order that
                 would prohib it such officer, director, agent, or emp loyee fro m engaging in or continuing any conduct, activity, or practice r elating
                 to the business of The Company.

      (b)        To the knowledge of The Co mpany and the Shareholders: (i) no such Proceeding has been Threatened, and (ii) no event has
                 occurred or circu mstance exists that may give rise to or serve as a basis for the commencement of any such Proceeding. The
                 Proceedings listed in the Disclosure Letter ( Appendi x “­D” ) will not have a Material Adverse Effect on the business, operations,
                 assets, condition, or prospects of The Company.

3.5           NO MATERIAL ADVERS E CHANGE

         (a)         Since January 1, 2005 and until the execution of this Agreement:

         (i)         No dividend, bonus or distribution (including without limitation, cash payment) has been declared, made or paid on or in
                     respect of any share capital of, or otherwise to any shareholder (or any Related Persons thereof) of The Co mpany;

         (ii)        Except as set forth in the Disclosure Letter ( Appendi x “­D” ), The Co mpany has conducted its business only in the ordinary
                     course of business, and there has been no material adverse change, nor have there been any events or circumsta nces that may
                     have a material adverse effect, including without limitation;

      (iii)      No change in The Co mpany's authorized or issued share capital; grant of any share options; issuance of any security convertib le
                 into such share capital; grant of any registration rights; purchase, redemption, retirement, or other acquisit ion by The Co mp an y of
                 any shares of such share capital;

      (iv)      No amend ment to the incorporation documents of The Company was made;

                                                                             15
         (v)         Except as detailed in Section 2.3(a)(5) no payment nor increase by The Company of any salaries, bonuses, or other
                     compensation payable by The Co mpany to any Shareholder, d irector, officer, o r (except in the ordinary course of business) to
                     any employee; or entry by The Company into any employ ment, or other similar Contract with any director, officer, or
                     emp loyee (except in the ord inary course of business), and no making, forg iveness or other change in the terms of any loan by
                     The Co mpany to any employee;

      (vi)      Except as detailed in Section 2.3(a)(5), no adoption of, or increase in the payments to or benefits under, any profit sharing , bonus,
                deferred co mpensation, savings, insurance, pension, retirement, or other employee benefit plan for or with any emp loyees o f The
                Co mpany;



      (ix)      No sale, transfer, lease, or other disposition of any asset of The Co mpany outside the ordinary course of business, nor mortg age,
                pledge, or imposition of any lien or other Encumbrance on any material asse t of The Co mpany; and no amend ment or mod ification
                of any agreement other than in the ordinary course of business;

      (xi)      No material change in the accounting methods, principles or pract ices followed by The Co mpany;

      (xii)      No agreement, co mmit ment, or undertaking, whether oral or written, by The Co mpany to do any of the foregoing.

(b)           There is no fact known to any Shareholder or The Co mpany (other than general ec onomic o r industry conditions) that has or will have
              a Material Adverse Effect or materially threatens, the assets, business, prospects, financial condition, or results of operat ions of The
              Co mpany that has not been set forth in this Agreement or the Disclosure Letter (Appendix “D”).



3.6     MR. NIMROD B EN-YEHUDA :

Mr. Nimrod Ben-Yehuda ( “Ni mrod” ):


                 a) Will prov ide his services to The Co mpany in the capacity of Ch ief Technology Officer for a period of no less than three years ,
                    starting on the date of execution of this Agreement.

                 b) Shall act as The Company’s Director of Business Development until such time as the board will resolve that the Company
                    should hire a dedicated person to serve in the capacity of Director of Business Development.

                 c) Will substantially devote all his time and efforts to the business of The Company and to the continued development of its
                    technology and intellectual property, as may be requested, fro m t ime to t ime, by The Co mpany ’s board of directors.

                 d) Nimrod shall not be involved, directly or indirectly, in any venture whose interests are deemed by The Co mpany ’s board of
                    directors, in conflict with The Co mpany or in the event such involvement is detriment to the business of The Co mpany. To the
                    extent that Nimrod is currently in any other venture or any other time-consuming activity and/or research and, to the extent that
                    Nimrod currently o wn other patents and/or technologies, disclosure of same is made in the Disclosure Letter (Appendix “D”).

                                                                            16
Nimrod’s compensation fro m The Co mpany shall include the following:

     e) Monthly gross salary of NIS 25,000 starting April 2005, including Twenty (20) paid vacation days per year, and specifically
        includes the compensation for the limitation undertaken under Section 6 herein belo w.

     f) Executive insurance.

     g) “Keren Hishtalmut at the rate of 10% (7.5% contribution by the Co mpany).

     h) Disability insurance at a rate not to exceed 2% with customary coverage.

     i) A fully paid rental car (including taxes assessed for private use).

     j) A company-provided mobile phone. The phone charges shall be fully covered by The Co mpany.

     k) A semi-annual bonus as following:

            (i) NIS 25,000 if the co mpany meets its financial targets in the pertinent half year.

           (ii) NIS 60,000 if the co mpany exceeds its financial targets by 30% or more in the pertinent half year.

Nimrod shall receive fro m The Co mpany the following for the purpose of performing his obligations in accordance with his
emp loyment with The Co mpany:

     l) A laptop computer paid by The Co mpany.

    m) A company cred it card to be used exclusively for co mpany -approved expenses. The use of such credit card shall be audited, at
       the end of each year, by the Co mpany’s auditors and any improper or un-approved use of the cred it card, as determined by the
       auditors, shall be deducted fro m Nimrod’s salary as expediently as possible.

     n) When traveling on business, the Company shall also pay:

          (iii) Airfare in economy class;

          (iv) Non-lu xu ry hotels;

           (v) Transportation;

          (vi) Up to the sum of $100 per day fo r other expenses.

         (vii) The Co mpany shall further pay for entertainment of customers and selected vendors and service providers hosted by
               Nimrod.

  A breach, by Nimrod, o f any of these provisions shall be considered a Material Breach as defined hereinafter and shall entit le the
  Investors to their remed ies resulting fro m a Material Breach as provided for hereinafter.

                                                                 17
4.            INDEMNIFICATION

       4.1        BREACHES B Y THE COMPANY

(a)                 The Co mpany shall be deemed in “Breach” in the event that:

      (i)           For the period of July 1, 2005 through March 31, 2006:

                        1. The Co mpany fails to deliver financial reports to Investors on the dates provided hereinbefore, provided the Co mpany
                           delivers such reports no later than 60 days subsequent to the dates provided hereinbefore.

                        2. Failure by the Co mpany and/or Nimrod to fulfill their undertakings pursuant to this Agreement.

      (ii)          At any time subsequent to March 31, 2006:

                        3. It fails to meet 65% of its financial targets as provided in the Business Plan in any given quarter; and/or,

                        4. It fails to meet any of its quarterly non-financial targets as provided in the Business Plan.

(b)                 The Co mpany shall be deemed to be in a “Material Breach” in the event that:

               (i) At any time subsequent to the execution of this Agreement, and provided the Investors are not in breach as provided herein

                                  (1) The Co mpany fa ils to deliver financial reports to Investors on the dates provided hereinbefore, p rovided
                                      such failure is not remed ied within 60 days.

                                  (2) The Co mpany and/or Nimrod fail to rectify a breach within 45 days of receipt of a notice of breach fro m
                                      The Investors.

      (ii)           Subsequent to march 31, 2006 and provided Investors are not in breach, as provided herein:

                (1) It fails to meet at least 75% of its cumulative financial targets for any two consecutive quarters, as provided in the Business
                    Plan; and/or

                (2) It fails to meet any of its quarterly non-financial targets for any quarter, as provided in the Business Plan and fails to remedy
                    such shortcomings, in addition to making the non-financial targets in the subsequent quarter;

4.2           REMEDIES GRANTED TO INVES TORS:

       (a)            Un less specifically agreed upon otherwise, The Co mpany and the Shareholders, severally, hereby undertake to
      indemn ify and hold harmless The Investors or, at The Investors option, The Co mpany, for any Liability, loss, claim, damage
      (including, without limitat ion, incidental and consequential damages), expense (including, without limitat ion, costs of inves tigation,
      defense, reasonable attorneys' fees, and other legal expenses) or diminution of value, wheth er or not involving a third-party claim
      (collect ively, "Damages"), arising, directly or indirectly, fro m or in connection with:

      (i)          any breach of any of the Shareholders ’ Warranties;

      (ii)         any breach by any Shareholder of any covenant or obligation of such Shareholder in this Agreement;

      (iii)        In case of Breach or Material Breach as defined above:


                                                                           18
                   (a) In the event of a Breach The Investors shall have the right, at their sole discretion, to postpone the installment of the
                       quarter subsequent to the breach until after the last installment of the investment.

                   (b) In the event of a Material Breach: Investors shall be under no obligation to further invest in the Company and shall
                       nonetheless receive fro m the Escrow holder the Ord inary Shares and Management Shares then remain ing in Escrow as
                       provided in the Escrow Provision – Provided, however, that the Co mpany fails to:

                       (i) Rectify the Material Breach in the subsequent quarter in addition to meeting the subsequent quarter’s targets; or

                      (ii) Repurchase from Investors all their shares of the Company at the price of $7.50 per shares, within 1 year fro m such
                           Material Breach (“ Repurchase ”).

          Notwithstanding the foregoing, should the Co mpany recruit a new investor or a purchaser for the entire co mpany at a price, or
          post-investment valuation of $5 million Dollars or higher, The Co mpany shall give Investors a notice of such investment and/or
          purchase and the Investors shall have the right to cure the funding of the Investment within 10 days of receipt of such notice a nd
          restore all their rights provided in the Agreement.
          It is hereby clarified that if the Investors decided to act according to this section they will not be able to act in accordance with
          section 4.2(i) or 4.2(ii) above.

4.3        Breaches by Investors and Remedies granted to Company :

      (a) Breach : Investors sole obligation is to fund the Investment in accordance with the Investment Agreement, unless The Co mpany is in
          breach. Investors shall be deemed in breach if Investors default on their funding obligations and fail to cure such default within 37
          days of receipt of a notice of default fro m the Co mpany.

      (b) Remedy : In the event of a breach by Investors, Investors shall lose their right to complete the investment and lose their right to the
          Management Shares held by the Escrow at such time – all of which shall be returned by Escrow to the Co mpany ’s pursuant to the
          Escrow Provision.

5     TIME LIMITATIONS

      (i) Subject to the clause (ii) belo w, Shareholders liability (for indemnification or otherwise) with respect to any of their Warran ties, or
          covenant or obligation in this Agreement shall continue until and be time barred in accordance with the Israeli statute of li mitation.

      (ii) The Shareholders acknowledge and agree that the Investors is and/or was under no obligation or duty whatsoever to investigate,
           inspect or examine the Shares and/or The Co mpany for defects or deficiencies at any time before, on or after the executio n da te,
           except for the examination of all documents and/or materials and/or other informat ion presented by the Shareholders to the Investors.

6         NON-COMPETITION B Y S HAREHOLDERS

6.1      COVENANT NOT TO COMPET E

(a)       For a period of 3 years after the date of signing of this Agreement, and in case of Nimrod 3 years after the date of terminat io n of his
          emp loyment with the Co mpany, which ever is later:

                                                                        19
      (i)      Each Shareholder will not, directly or indirectly, engage or invest in, own, manage, operate, finance, control, or participat e in
               the ownership, management, operation, or control o f, be emp loyed by, associated with, o r in any manner connected with, lend
               such Shareholders’ name or any similar name to, lend such Shareholders ’ cred it to, o r render services or advice to, any
               business whose products or activities co mpete in whole or in part with the products or activities o f The Co mpany in Israel
               (boundaries as of execution date), provided, however, that any Shareholder may purchase or otherwise acquire up to (but not
               more than) one percent of any class of securities of any enterprise (but without otherwise participating in the activit ies of such
               enterprise) if such securities are listed on any national or regional securities exchange. Each Seller agrees that this coven ant is
               reasonable with respect to its duration, geographical area, and scope;

      (ii)     Each Shareholder will not, directly or indirectly, either for himself or any other Person, (A) induce or attempt to induce any
               emp loyee of The Co mpany to leave its emp loy, (B) employ, or otherwise engage as an employee, independent contractor, or
               otherwise, any employee of The Co mpany, o r (D) induce or attempt to induce any customer, supplier, licensee, or business
               relation of The Co mpany to cease doing business with such Company, or in any way interfere with the relat ionship between
               any customer, supplier, licensee, or business relation of The Co mpany.

(b)     In the event of a breach by any Shareholder o f any covenant set forth in clause (a) above, the term of such covenant will be extended
        by the period of the duration of such breach.

(c)     Each Shareholder will, for a period of 3 years after the date of signing of this Agreement (as defined hereinafter), within ten days after
        accepting any employ ment, advise The Investors of the identity of any emp loyer of such Shareholder. The Investors or The Co mp any
        may serve notice upon each such emp loyer that such Shareholder is bound by the non -competition covenant of this Agreement
        (Section 6.1) and furn ish each such employer with a copy of Sections 6 and 5.1 o f this Agreement or relevant portions thereof .

(d)     The restrictions under (a), (b) and (c) above shall apply also to the Investors mutatis mutandis.

7.      GEN ERAL PROVIS IONS

7.1     EXPENS ES

        Except as otherwise expressly provided in this Agreement, the Investors, the Shareholders and The Co mpany will bear th eir
        respective expenses incurred in connection with the preparation, execution, and performance of this Agreement and the
        contemplated transactions, including all fees and expenses of agents, representatives, counsel, and accountants. stamp duty, if
        any, payable in respect of this Agreement shall be paid by the Shareholders and/or The Co mpany. The Shareholder will ensure
        that The Company does not bear or incur any fees and expenses of agents, representatives, counsel, and accountants

                                                                       20
7.2   CONFIDENTIALITY / PUB LIC ANNOUNCEMENTS

      This Agreement and its contents shall be kept confidential by the parties hereto. The contents of any communication about thi s
      Agreement to third part ies shall be mutually agreed upon by the parties. Any public announcement, press release or similar pu blic
      communicat ion with respect to this Agreement will, however, be issued at such time and in such manner as shall be mutually
      determined.

7.3   ENTIRE AGREEMENT AND MODIFICATION

      Save for The Loan Agreement, this Agreement replaces and supersedes all prior agreements, term sheets or any other document
      or previous understanding between the parties with respect to its subject matter and constitutes (along with all its Exh ibits wh ich
      are an integral part of it) a co mp lete and exclusive statement of the terms of the agreement between the parties with respect to its
      subject matter. This Agreement may not be amended except by a written agreement executed and signed by the parties to be
      charged with the amendment, and any waiver of this provision shall only be valid and b inding if executed in writing by the party
      giving the waiver.

7.4   DIS CLOS URE LETTER

      In the event of any inconsistency between any provisions of and/or the statements in this Agreement and those in the Disclosu re
      Letter (Appendi x “D”) (unless otherwise specifically stated in the Disclosure Letter with respect to a specific representation or
      warranty), the provisions or statements in this Agreement shall prevail.

7.5   ASSIGNMENTS, S UCCESSORS, AND NO THIRD-PARTY RIGHTS

      Neither party may assign any of its rights under this Agreement without the prior consent of the other parties, except that The
      Investors may assign any of their rights (but not obligations) under this Agreement to any related person or entity. Subject to the
      above said, this Agreement will apply to, be binding in all respects upon, and inure to the benefit of the successors and permit ted
      assigns of the parties.

7.6   S EVERAB ILITY

      If any provision of th is Agreement is held invalid or unenforceable by any court o r arbitral t ribunal of co mpetent ju risdiction, the
      other provisions of this Agreement will remain in full force and effect, and the invalid or unenforceable provision shall b e
      substituted by a valid and enforceable provision closest to the economic intent intended by the parties with the invalid or
      unenforceable provision which achieves, as far as possible, the original business purposes of the excluded provision.

7.7   GOVERNING LAW AND ARB ITRATION

      7.7.1       Governing Law and J urisdiction

      This Agreement shall be governed by and construed according to the laws of Israel and the authorized courts of Tel-Aviv, Israel,
      shall have the sole and exclusive jurisdiction over any dispute arising between the parties hereto.

                                                                      21
7.8       ENTRY INTO FORCE / COUNTERPARTS

(a)      This Agreement shall co me into force as of the date last below written, once duly executed by all the parties.

(b)      This Agreement and its Exhib its may be executed in 3 orig inal sets (one such set for each party).



IN WITNESS WHEREOF, the parties have executed and deli vered this Agreement as of the date last below written.

Pimi Mari on Hol di ngs, Ltd.                                                 Title

By: /s/ Eitan Sh meu li                                                      Director
Eitan Sh meuli

Omdan Education and Instructing, Ltd.

/s/ Eitan Dh meuli
Eitan Dh meuli

INS Captial LLC.

/s/ Joe Shapira                                                       Managing Member
Joe Shapira




Agreed to by:

eNitiati ves - New Business Architects, Ltd.


/s/ Reuven Marko
Name: Reuven Marko
Title: General Manager


                                                                        22
                                                            EXHIB IT A

                                                            Mile Stones




First Quarter (Q4 2005)
     
     Begin series of field trials
     Initial web site on air
     Attend key industry conference to promote next seeding season use of products follo wed by aggressive follo w-up with key lead s.
     Identify & appoint Israel Sales manager with primary task to aggressively begin sales in Israel
     Identify certificat ion requirements and specialists in key countries/regions

Second Quarter (Q1 2006)
     Identify and appoint CEO to company, subect to comit ment of the Investors ot continue their investment.
     Begin field trial in at least Eu rope or USA
     mplete first draft of usage protocol
        Co
Third Quarter (Q2 2006)
     Gather and publish results of field trials
     mplete formal usage protocol
        Co
     minate world wide Marketing and Sale Manager.
        No

Fourth Quarter (Q3 2006)
     at least one new product to product line
        Add
     sale to at least one non-Israel client
        First



                                                                A-1
                               Financi al plan

                                                                  2005
                                                 Q1              Q2              Q3               Q4
Sales
Diluted Material (Litters)                             -               -               -                25
Price per Litter                          $           20     $        20     $        22     $          22
Sales of d iluted (in $000)               $            -     $         -     $         -     $         550

Extract Material (Litters)                             -               -               -                -
Price per Litter                          $        3,000     $     3,000     $     3,000     $      3,000
Sales of Ext ract ($000)                               -               -               -                -

Sales of Potato Spudefender               $             -    $          -    $   15,000      $     15,000

Total Revenues                            $             -    $          -    $   15,000      $     15,550

Total Revenues Annual                                                                        $     30,550


Expenses
Cost of Goods Sold                        $             -    $         -     $        - $              83
Gross Profit                              $             -    $         -     $   15,000   $        15,468
Gross Margin                                          n/a            n/a            100 %              99 %


Research & Development                    $      15,000      $   34,000      $   45,000      $    50,000
Marketing & Sales                         $       1,000      $    2,000      $   15,000      $    40,070
General & Ad ministrative                 $       6,000      $    6,000      $   11,500      $    28,240
Total Other Expenses                      $      22,000      $   42,000      $   71,500      $   118,310

Pre Tax Profit                            $      (22,000 )   $   (42,000 )   $   (56,500 )   $   (102,843 )

Pre Tax Profit Annual                                                                        $   (223,343 )


Proceeds from the Investment              $      50,000      $   50,000      $   80,000      $   100,000

Cash-on-hand                              $      28,000      $   36,000      $   59,500      $     56,658

Accumulated investment                    $      50,000      $   100,000     $   180,000     $   280,000




                                    A-2
                                                               2006
                                              Q1               Q2               Q3               Q4
Sales
Diluted Material (Litters)                     75              650            1,200            2,200
Price per Litter                     $         25     $         25     $         25     $         25
Sales of d iluted (in $000)          $      1,875     $     16,250     $     30,000     $     55,000

Extract Material (Litters)                      -                -                -                1
Price per Litter                     $      3,000     $      3,000     $      3,000     $      3,000
Sales of Ext ract ($000)                        -                -                -            3,000

Sales of Potato Spudefender          $     15,000     $     15,000     $     30,000     $     30,000

Total Revenues                       $     16,875     $     31,250     $     60,000     $     88,000

Total Revenues Annual                                                                   $   196,125


Expenses
Cost of Goods Sold                   $        281   $        2,438   $        4,500   $        8,550
Gross Profit                         $     16,594   $       28,813   $       55,500   $       79,450
Gross Margin                                   98 %             92 %             93 %             90 %


Research & Development               $    55,000      $    65,500      $    86,500      $    91,750
Marketing & Sales                    $    51,000      $    56,000      $    68,000      $    68,000
General & Ad ministrative            $    36,500      $    36,500      $    39,500      $    45,000
Total Other Expenses                 $   142,500      $   158,000      $   194,000      $   204,750

Pre Tax Profit                       $   (125,906 )   $   (129,188 )   $   (138,500 )   $   (125,300 )

Pre Tax Profit Annual                                                                   $   (518,894 )


Proceeds from the Investment         $   115,000      $   105,000      $   100,000      $   100,000
Cash-on-hand                         $    45,751      $    21,564      $   (16,936 )    $   (42,236 )

Accumulated investment               $   395,000      $   500,000      $   600,000      $   700,000




                               A-3
                                                             2007
                                              Q1            Q2              Q3              Q4
Sales
Diluted Material (Litters)                 3,750          7,000          10,000         14,000
Price per Litter                     $        22   $         22     $        22   $         22
Sales of d iluted (in $000)          $    82,500   $    154,000     $   220,000   $    308,000

Extract Material (Litters)                     4             8              18              33
Price per Litter                     $     3,000   $     3,000      $    3,000    $      3,000
Sales of Ext ract ($000)                  10,500        22,500          52,500          97,500

Sales of Potato Spudefender          $    30,000   $    30,000      $   45,000    $     45,000

Total Revenues                       $   123,000   $    206,500     $   317,500   $    450,500

Total Revenues Annual                                                             $   1,097,500


Expenses
Cost of Goods Sold                   $    13,425   $     25,350   $      38,250   $     55,950
Gross Profit                         $   109,575   $    181,150   $     279,250   $    394,550
Gross Margin                                  89 %           88 %            88 %           88 %


Research & Development               $    96,750   $     96,750     $   102,000   $    102,000
Marketing & Sales                    $    68,000   $     68,000     $    86,750   $     86,750
General & Ad ministrative            $    47,000   $     47,000     $    47,000   $     47,000
Total Other Expenses                 $   211,750   $    211,750     $   235,750   $    235,750

Pre Tax Profit                       $   (102,175 ) $   (30,600 ) $     43,500    $    158,800

Pre Tax Profit Annual                                                             $     69,525


Proceeds from the Investment         $   100,000   $    100,000     $        -    $          -
Cash-on-hand                         $   (44,411 ) $     24,989     $   68,489    $    227,289

Accumulated investment               $   800,000   $    900,000     $   900,000   $    900,000




                               A-4
                                                                Exhibit B
                                                            LOAN AGREEMENT

                                           This Loan Agreement is entered into by and among

Debtor                          Pimi Marion Ho ldings Ltd, a co mpany incorporated in the State of Israel, and its Subsidiaries, wherever they
                                may be incorporated (hereinafter, “the Co mpany”) ,

Lenders:                        Alon Carmel, whose address is 270 No. Cannon Dr., Beverly Hills, CA 90210,

                                And

                                JNS Cap ital LLC, whose address is 3200 Toppington Dr., Beverly Hills, CA 90210

                                (Hereinafter jo intly referred to as “Lenders”)




Whereas          Lenders have agreed in p rincipal to invest the sum of US$900,000 in the Co mpany, at pre -investment valuation of the
                 company of $900,000 and against the issuance by the Company, to Lenders, of 1200 fully paid ordinary shares of the
                 Co mpany, representing, post issuance, 50% of the issued share capital of the Co mpany; and

Whereas          Lenders and the Co mpany are negotiating the terms of the Investment Agreement and due diligence by Lenders and
                 anticipate comp letion of such within sixty (60) days; and

Whereas          Lenders have agreed to lend to the Company the sum of $50,000 (“ The Loan ”);


                 NOW, THEREFOR:

  1. Preamble and Appendices

The Preamb le to this Loan Agreement and the Appendices are one and integral part of the Loan Agreement.

  2. Purpose of the Loan

                                                                      B-1
The Co mpany shall use the Loan for
         a. Develop ment of documentation and manuals for use of the Co mpany ’s product of Seed Potatoes treatment (to be completed
            within 60 days).
         b. Advancement of sales efforts of the Co mpany’s products in Israel.
         c. A tour of various trade shows and potential customers in the United States license application fro m the EPA.
         d. Payment to patent lawyers in order to advance patents applications.

  3. The Loan

The Loan shall be made in one installment of $50,000 (fifty thousands US Do llars) (hereinafter: “ The Loan ”).

The Loan shall be transferred, in full, to the bank account of the Company within 2 working days from the date of signature o f this Loan
Agreement by all parties.

The Co mpany’s bank account details are as follows:
Name: Pimi Marion Holdings Ltd.
Account # 100083
Branch 537 (Yaalo m Branch)
Poalim Bank # 12
Code: Poalilit

  4. Interest on and Term of the Loan

The Loan shall bear an interest rate of 4% above the six month LIBOR.

The Co mpany shall repay the loan in one pay ment, including principal and interest, 180 days subsequent to the funding of the Loan.

  5. Event of Default

In the event of a default, to be defined as the breach of any provision of this Loan Agreement, Lenders shall be entit led to any and all remedial
measures provided to Lender as aforementioned and hereinafter described. Without derogating fro m any other provision of this Agreement, fo r
the purpose of this section herein described, and the section that follows, the Co mpany and its Subsidiaries, jo intly and sev erally shall be
referred to as the Company.

An Event of Default could occur hereunder if:

(a) The Co mpany shall:
       (i)     Apply for or consent to the appointment of a receiver, trustee or liquidator for it or all or a substantial part of its assets,
       (ii)    Admit in writing its inability to pay its debts as they mature,
       (iii)   Make a general assignment for the benefit of creditors,
       (iv)    Be adjudicated a bankrupt or insolvent,
       (v)     File a voluntary petition for winding up or a petition or an answer seeking reorganization or an a rrangement with creditors to
               take advantage of any insolvency law,
       (vi)    File an answer admitting the material allegations of a petition filed against it in any winding up, reorganizat ion or insolve ncy
               proceeding or fail to dis miss such petition with in 60 days after the filing thereof; OR

(b)      If an order, judg ment or decree shall be entered, without the application, approval or a consent of the Company by any court of
         competent jurisdiction approving a petition seeking reorganization or liquidation of the Co mpany or appointing a receiver, trustee or
         liquidator o f the Co mpany for all or a part of its assets and such order, judgment or decree shall not be vacated or stayed o n appeal or
         otherwise stayed within 60 days; OR

                                                                       B-2
(c)        The Co mpany has not fulfilled its obligations to repay the loan(s) herein described.

Notwithstanding the above, if such breach is cured by the Co mpany within 30 days fro m the date the Co mpany received a notice fro m the
Lender with respect to such Event of Default, such default will be considered cured and all steps taken by the Lender and/ or the Escrow Agent,
if any, will be canceled.

  6. Remedial Measure in Event of Default

Upon the occurrence of an Event of Default, the Lenders may, in addit ion to all other remed ies provided to Lenders under appl icable laws,
declare immed iately due and payable the entire outstanding balance of the loan, principal and interest accrued thereon, and any and all other
sums payable hereunder, and may decide to exercise his rights according to any law in order to enable him to receive all amo u nts due on that
date. A Receiver, if appointed, shall be entit led to any and all powers and authorities available under law, shall be empo wer ed to realize all
rights of the Lender in order to deal with the Co mpany ’s assets, in accordance with his discretion, for the purpose of enabling the Lender to
receive the amounts specified above.

Notwithstanding, the waiver of a default by Lenders, or their failure to invoke one or more remedial measures, shall not be c onsidered as a
waiver of other defaults and remedial measures provided herein.

  7. Absence of Di vi dends

The Co mpany hereby declares that no form of div idend shall be distributed by the same to its shareholders prior to the repayment or conversion
of any outstanding Loan amounts owed to the Lender.

  8. No Finders Fee

The Co mpany confirms that no agent, finder or broker acting on behalf of or under the authority of the Company is or will b e entitled to any
broker’s or finder’s fee or any other similar co mmission or fee in connection with the transactions contemplated hereby.

  9. Confi dentiality

The Co mpany, the Lender and any other person acting on their behalf shall keep this Agreement and any related corresponde nce in strict
confidence, and shall not issue any public statement or press release concerning this transaction without the other parties p rior written approval
of the substance and form of any such statement or release. The Lender agrees to treat confidentially all confidential informat ion provided by
the Co mpany and shall use such confidential info rmation solely for the purpose of evaluating the transactions contemplated he reby and shall
not disclose any of such confidential information to any third party without the prior written consent of the Co mpany.

      10. Notices

All notices dispatched and sent by registered mail, by courier, by fax or by e -mail shall be deemed to have been delivered five days after
posting them if by registered mail, and on the following business day when delivered by courier, by fax or by e -mail, subject to receipt of
delivery, fax or e -mail transmittal confirmat ion.

      11. Conflict of Laws

The laws of the State of Israel shall govern this Agreement. The co mpetent courts of the State of Israel, and particularly of Tel Aviv -Jaffo,
shall have jurisdiction in all disputes, which may arise in connection with this Agreement.

                                                                         B-3
  12. Cost of Litigati on:

In the event of litigation resulting fro m this agreement, the loosing party shall reimbu rse the prevailing party for all of its expenses in
connection with such lit igation, including, without limitation, Attorneys fees.


The Lenders                                                               The Company

Date : ___________________________                                        Date : ___________________________

/s/ Alon Carmel                                                           /s/ Eitan Sh mueli
Alon Carmel                                                               Eitan Sh mueli, Manager


JNS Cap ital LLC

/s/ Joe Shapira
Joe Shapira, Managing Member




                                                                    B-4
                                                                 Exhibit C

We hereby state in good faith that this is a comprehensive list that includes all patents and patents applications under sect ion 1g of the Term
Sheet.


275’1        US Patent No . 6,797,320 – US Application No. 09/744,681 tit led “Environ mentally Co mpatib le Processes, Co mpositions And
             Materials Treated Thereby” was filed on June 6, 2001 as part of a section 371 of PCT/IL99/00403 which, in turn, claimed priority
             fro m Israeli Patent Application No. 125520 filed Ju ly 27, 1998. Applicat ion 09/744,681 matu red into US Patent 6,797,302 and is
             in force. Assignment duly filed in the USPTO on September 15, 2005 fo r all patent right to the assignee Pimi Marion Holdin gs
             Ltd.

275’2        US Patent Application No. 10/ 792,759 t itled “Environ mentally Co mpatib le Processes, Co mpositions And Materials Treated
             Thereby” was filed on March 5, 2004 as a Div isional Application of US Application No. 09/744,681 (275’1). As of May 9, 2005
             our US Associates has advised that the Examiner is preparing to allow this Application.

275’3        New US Patent Application tit led “Environ mentally Co mpatib le Processes, Compositions And Materials Treated Thereby ” was
             filed or is being filed transient to the preparation of this report as a Divisional Application of US Application No. 09/744,681
             (275’1).

275’4        European Patent Application No. 99933105.1 tit led “Environmentally Co mpatib le Processes, Compositions And Materials
             Treated Thereby” was filed on July 22, 1999 as part of a section 371 of PCT/ IL99/ 00403.

275’5        Chinese Patent No. 99810112.5 tit led “Environ mentally Co mpatible Processes, Co mpositions And Materials Treated Thereby ”
             was granted on July 23, 2003 and is in force.

275’6        Russian Patent Application No. 2001102049 tit led “Environ mentally Co mpatib le Processes, Co mpositions And Materials Treated
             Thereby” has received a Decision of Grant on February 16, 2005.

275’7        Russian Patent Application No. 2005115093 tit led “Environ mentally Co mpatib le Processes, Co mpositions And Materials Treated
             Thereby” was filed on May 16 2005 as a Divisional Application of Russian Patent Application No. 2001102049 (275 ’6)

275’8        Australian Patent No. 757,181 tit led “Environ mentally Co mpatib le Processes, Compositions And Materials Treated Thereby ”
             matured fro m Australian Patent Application 49273/99 was filed on June 6, 2001 as part of a section 371 of PCT/IL99/00403.

275’9        South African Patent No. 2001/ 1528 titled “Environmentally Co mpatib le Processes, Compositions And Materials Treated
             Thereby” was issued on April 24, 2002 and is in force.

275’10       Israeli Patent Application No. 125520 tit led “Environ mentally Co mpatible Processes, Co mpositions And Materials Treated
             Thereby” was filed on July 27, 1998.

275’11       Chilean Patent Application No. 1675-99 t itled “Environmentally Co mpatible Processes, Co mpositions And Materials Treated
             Thereby”.

275’12       Mexican Patent Application No. PA/a/2001/ 000967 tit led “Environmentally Co mpatib le Processes, Compositions And Materials
             Treated Thereby”. Notice of A llo wance recently received.

275’13       Canadian Patent Application No. 2,338,718 tit led “Environ mentally Co mpatib le Processes, Co mpositions And Materials Treated
             Thereby”. As of May 13, 2005 our Canadian Associates have been instructed to duly file the Assignment of all patent right to the
             name of Pimi Marion Ho ldings Ltd.

                                                                      C-1
275’14   Kenyan Patent Application No. PCT/IL99/ 00403 tit led “Environ mentally Co mpatible Processes, Co mpositions And Materials
         Treated Thereby”. A Response to the outstanding Office Action is being prepared and shall be timely filed in the Kenyan Patent
         Office.

275’15   Argentinean Patent Application No. P990103701 t itled “Environ mentally Co mpatib le Processes, Compositions And Materials
         Treated Thereby” is pending before the Argentinean Patent Office.

275’16   Bulgarian Patent No. 105167 t itled “Environ mentally Co mpatib le Processes, Co mpositions And Materials Treated Thereby ” is
         pending before the Bulgarian Patent Office.

275’17   Bolivian Patent Application No. 7651 titled “Environ mentally Co mpatib le Processes, Co mpositions And Materials Treated
         Thereby” is pending before the Boliv ian Patent Office.

275’18   Brazilian Patent Application No. PI9912697-4 tit led “Environ mentally Co mpatible Processes, Compositions And Materials
         Treated Thereby” is pending before the Brazilian Patent Office.

275’19   Colo mb ian Patent Application No. 99047340 tit led “Environ mentally Co mpatible Processes, Compositions And Materials
         Treated Thereby” is pending before the Colo mbian Patent Office.

275’20   Costa Rican Patent Applicat ion No. 6061 t itled “Env iron mentally Co mpatible Processes, Co mpos itions And Materials Treated
         Thereby” is pending before the Costa Rican Patent Office.

275’21   Cuban Patent Application No. 22/2001 tit led “Environ mentally Co mpatible Processes, Compositions And Materials Treated
         Thereby” is pending before the Cuban Patent Office.

275’22   Czech Republic Patent Application No. PV 2001-254 titled “Environ mentally Co mpatible Processes, Co mpositions And
         Materials Treated Thereby” is pending before the Czech Republic Patent Office.

275’23   Georgian Patent Application No. AP1999004257 t itled “Environ mentally Co mpatib le Processes, Compositions And Materials
         Treated Thereby” is pending before the Georgian Patent Office.

275’24   Guatemala Patent Application No. PI99-01099 t itled “Environmentally Co mpatible Processes, Co mpositions And Materials
         Treated Thereby” is pending before the Guatemala Patent Office.

275’25   Honduras Patent Application No. PCT/IL99/120 t itled “Environmentally Co mpatible Processes, Compositions And Materials
         Treated Thereby” is pending before the Honduras Patent Office.

275’26   Hungarian Patent Application No. P0201109 titled “Environ mentally Co mpatible Processes, Co mpositions And Materials
         Treated Thereby” is pending before the Hungarian Patent Office.

275’27   Korean Patent Application No. 2001-7001082 tit led “Environ mentally Co mpatible Processes, Compositions and Materials
         Treated Thereby” is pending before the Korean Patent Office.

275’28   Latvian Patent Registration No. 12750 tit led “Environmentally Co mpatible Processes, Compositions And Materials Treated
         Thereby”. As of May 13, 2005 our Latvian Associates have been instructed to duly file the Assignment of all patent right to the
         name of Pimi Marion Ho ldings Ltd.

                                                                C-2
275’29   Nicaragua Patent Reg istration No. 1441; Patent No. 125520 t itled “Environ mentally Co mpatib le Processes, Co mpositions And
         Materials Treated Thereby” was granted on November 20. 2001.

275’30   New Zealand Patent Applicat ion No. 509566 tit led “Environ mentally Co mpatible Processes, Co mpositions And Materials
         Treated Thereby” is pending before the New Zealand Patent Office and received a notice of Acceptance on June 4 2003.

275’31   Peruvian Patent Application No. 760 titled “Environ mentally Co mpatible Processes, Co mpositions And Materials Treated
         Thereby” is pending before the Peruvian Patent Office.

275’32   Polish Patent Application No. P-348722 tit led “Environ mentally Co mpat ible Processes, Co mpositions And Materials Treated
         Thereby” is pending before the Po lish Patent Office. As of May 13, 2005 our Po lish Associates have been instructed to duly file
         the Assignment of all patent right to the name of Pimi Marion Hold ings Ltd.

275’33   Paraguay Patent No. 4217 (Application 72/99) titled “Environ mentally Co mpatible Processes, Co mpositions and Materials
         Treated Thereby” was issued by the Paraguayan Patent Office on August 2, 2003.

275’34   Slovenian Patent No. 9920057 - 20615 tit led “Environ mentally Co mpatible Processes, Compositions and Materials Treated
         Thereby” was issued by the Slovenian Patent Office on February 28, 2002.

275’35   Slovakian Patent Application No. PV97-2001 tit led “Environ mentally Co mpatible Processes, Compositions And Materials
         Treated Thereby” is pending before the Slovakian Patent Office.

275’36   Turkish Patent No. TR2001 00231 t itled “Environmentally Co mpatible Processes, Co mpositions And Materials Treated Thereby ”
         is pending before the Turkish Patent Office.

275’37   Ukrain ian Patent Application No. 2001010598 tit led “Environ mentally Co mpat ible Processes, Co mpositions And Materials
         Treated Thereby” was exp ressly abandoned by Makhteshim in the Ukrainian Patent Office.

275’38   Uruguayan Patent Application No. 025.625 tit led “Environ mentally Co mpatible Processes, Compositions And Materials Treated
         Thereby” is pending before the Uruguayan Patent Office.

275’39   Venezuelan Patent Application No. 1999-001481 t itled “Environmentally Co mpatible Processes, Compositions And Materials
         Treated Thereby” is pending before the Venezuelan Patent Office.

275’40   Serbia and Montenegro Patent Application No. P-51/01 t itled “Environ mentally Co mpatib le Processes, Co mpositions And
         Materials Treated Thereby” is pending before the Serbia and Montenegro Patent Office.

275’41   Norweg ian Patent Application No. 20010447 tit led “Environ mentally Co mpatible Processes, Compositions And Materials
         Treated Thereby” is pending before the Norwegian Patent Office.

275’42   Ro manian Patent Application No. a2001-00090 titled “Environmentally Co mpatib le Processes, Co mpositions And Materials
         Treated Thereby” is pending before the Roman ian Patent Office.

275’43   US Trademark Application No. 78620464 for the mark “SPUDEFENDER” in Class 001 was filed on May 1, 2005 and is pending
         before the US Patent and Trademark Office.

275’44   US Trademark Application No. 78620465 for the mark “FOG IT” in Class 001 was filed on May 1, 2005 and is pending before
         the US Patent and Trademark Office.



                                                                 C-3
                                                               Exhibit D
                                                         EDISCLOSURE LETER

This letter together with the documents listed in Specific Disclosure Appendix constitute the Disclosure Letter referred to in the agreement (the
“ Agreement ”) to be entered into today between Pimi Marion Hold ings Ltd (the “ Company ”), Mr. Nimrod Ben-Yehuda and Omdan
Consulting and Instructing LTD (jointly and severally: “Sharehol ders” ) fro m one side, and Mr. Alon Carmel and JNS Cap ital LLC (jointly
and severally: “The Investors” ) fro m the other side, in connection with the investment made by the in vestors in the co mpany against the
issuance of the company’s Ordinary and Management shares.

Preliminary Matters

          Unless the context requires otherwise, words and expressions defined in the Agreement shall have the same mean ings in this letter.
          References in this letter to paragraph, headings and numbers shall, unless the context otherwise requires, to be those headin gs and
          numbers in the agreement. Such headings and numbers are for convenience only and shall not alter the construction of this letter.

          In the event of any conflict or inconsistency between any provisions of and/or the statements in this Agreement and those in this
          letter, unless otherwise specifically stated in this letter with respect to a specific representation or warranty, the provis ions or
          statements in the Agreement shall prevail.

          Where any conflict or inconsistency arises between the contents of any document supplied to the investors by the shareholders and
          the terms of this letter and the documents attached to this letter, the info rmation contained in this letter shall prevail unless otherwise
          expressly stated in this letter.


                                                                        D-1
                                                     Specific Disclosures


   Article                                                               Disclosure
  3.1.3 (c)                                                  See Disclosure Document no. 1.
  3.1.3 (d)       Bank Hapoalim LTD. Branch no. 537 – Yaalo m. Account no. 100083. Signatories: Mr. Eitan Sh mueli or Mr.
                  Nimrod Ben-Yehuda.
   3.1.3(e)                                                                None.
  3.1.5 (a)                                                                None.
  3.1.5 (b)                                                                None.
 3.2.2 (a) (i)                                               See Disclosure Document no. 2.
3.2.2 (a) (iii)                                                            None.
  3.2.2 (b1)         Lease Agreement dated 1.4.2005 signed wi th Ki butz Aloni m is attached as Disclosure Document no. 3.
                    List of countries in which assignment of title in Patents or Patents applications was not completed yet: Argentina,
                    Georgia, Guatemala, Honduras, Mexico, Norway, Paraguay, Republic of Korea, Ro mania, Slovakia, Venezuela
                    Yugoslavia, Ch ina, Turkey, Czech Republic, South Africa, Cuba, Uruguay, Peru, Costa Rica and Co lo mbia.
                    Assignment between Makhteshim Chemical Works LTD. and Nir Ecology LTD. of the Patents and the Patents
                    application is attached as Disclosure Document no. 4.
                    Agreement between the Co mpany and Nir Ecology LTD. with regard to the co mplet ion of the assignments is
                    attached as Disclosure Document no. 5.
 3.2.2 (b3)                                                  See Disclosure Document no. 6.
3.2.2 (b5) (i)     Sanosil SA supplies the concentrate for the material and owns its formul a. Agreement for the suppl y of the
                                     concentrate by Nir Ecology LTD. is attached as Disclosure Document no. 7.
                   The right of use of the patents for water treatment applications has been granted without li mitati on of ti me
                                            and territory to Nir Ecolgy Ni mrod an/or Nava Ben Yehuda .
3.2.2 (b5) (ii)     Nimrod Ben-Yehuda or Nir Ecol ogy or any company in which Ni mrod Ben-Yehuda or Nava Ben-Yehuda
                                     have an i nterest, in has the right of use in the Patents for water treatments.
3.2.2 (b6) (a)                                                             None.
3.2.2 (b6) (b)                                                             None.
                  None.
  3.2.2 (b7)            Mr. Avi Levi’s empl oyment contract wi th Pi mi is attached as Disclosure Document no. 8. Nimrod
                                                Ben-Yehuda terms of empl oyment are as in section 3.6.
    3.3.1                                                    See Disclosure Document no. 9.
                             (v) The Co mpany patent advisor is advocate Daniel Brass who is currently entitled to monthly payment
                           of US$ 3,000 per month.

                            (vi) The Co mpany legal advisor is advocates Eitan Sh mueli. M r Sh mueli fee will be agreed upon for
                          any service or will based on hourly fee.

                            (vii)   The Co mpany accountat is Fhan Kane who is entitled to annual pay ment of US$ 3,000 for the year
                          2004.
    3.3.2                                                            None.
    3.3.3                                                            None.
    3.3.4                                                            None.
    3.3.5                                     See Disclosure Document no. 10. To be attached.
    3.3.6                                                            None.
  3.3.7 (i)                                                          None.
  3.3.8 (i)                                                          None.
   3.4 (a)                                                           None.
   3.4 (b)                                                           None.
 3.5 (a) (ii)                                                        None.
   3.5 (b)                                                           None.
   3.6 (d)             Water treatment and other areas of operation, which are not covered by the patents and/ or patents
                                                                 applications.
Exhi bit 10.21

                                              Letter of Intent dated 20 th Day of January 2009


Between : Vegiesafe LLC a Limited Liability Co mpany registered in New York whose address is 126 Fifth Avenue 4th Floor New York, NY
10011-5629 USA ("Vegiesafe") and Between Pimi Agro CleanTech Ltd. a co mpany reg istered in Israel whose address is POB 107 Kibutz
Alonim, Israel (" Pi mi ").

Whereas               Pimi developed Stabilized Hydrogen Pero xide ( STHP ) (" The Product ") and a storage protocol (" the Storage
                      Protocol ") used in the treat ment of fruits and vegetables in storage and has filed for patent registrations for su ch
                      applications and formu lations;

And Whereas                         Pimi has reg istered patents and patents application fo r the Product and the Storage Protocol (hereinafter
                                    the Product and Storage Protocol are collectively referred to as the " Technol ogy ") in various countries
                                    among them the USA . The patents, patent applications and all enhancements, improvements, derivatives
                                    and additions thereto, whether now in existence or created in the future are hereinafter referred to as the
                                    Patents. Set forth in Exhi bi t A attached hereto is a list of the registered Patents and applications.

And Whereas                         Pimi has introduced the Technology for use in storage of potatoes.

And Whereas                         Pimi is active currently in Eu rope and Israel and desires to expand and start activity in the US , Canada
                                    and Mexico .

And Whereas                         Vegiesafe and its affiliated companies are market ing, brand and product development co mpanies which d o
                                    business with mass-market retailers and supermarket stores in the US such as Wal-Mart (" WM "),
                                    Target and others .

And Whereas                         Vegiesafe has represented to Pimi that its affiliated co mpanies have relationships with WM and other
                                    mass-market retailers and major supermarket chains in North A merica (" Retailers ") and will seek to
                                    build a business for CIPC free potatoes and potato products using the Technology for the Retailers.

And Whereas                         The parties have agreed to cooperate in the development and expansion of Pimi act ivities in the US .


                                               Now it has been Declared and Agreed between the Parties:

     1. Preamble and Appendices

           1.1 The Preamb le and appendices to this LOI is one and integral part of it.

           1.2 The headings of the section are for convenient only and would not serve for inter-pretation to this LOI .

     2. Incorporati on a US Subsidi ary by Pi mi

           2.1 Pimi intends to incorporate a fully owned subsidiary in the US (" NEWCO " or " NC ") which might be the main vehicle for
               Pimi activ ities in the US .

           2.2 Pimi will grant to NC licenses for the use of the under the Patents. The licenses for the US will be an exclu-sive license and
               the licenses for Canada and Mexico will be non-exclusive.

     3. The Joint Venture between the Parties

           3.1 On or before January 15, 2009 NC or Pimi and Vegiesafe will enter into a joint venture agree-ment (" JV Agreement ")
               incorporating the terms and conditions set forth in this LOI (" The Joint Venture "). The Joint Venture will be in the form of
               an American LLC or partnership as the parties will agree. The LLC or the partnership will be incorporated when the Joint
               Venture will co mmercially justify it. In the event a JV Agreement is not entered into by February 15, 2009, the terms of this
               LOI and the terms stated herein to be set forth or provided in the JV Agreement shall constitute the parties JV Agreement.

           3.2 In the event any Retailer, any fast-food chain or any majo r packaged, frozen or snack food marketers or any major or national
               vegetable (or fruit) growers and major or national distributors (all co llect ively referred to herein as "Distributor"), in the US
               (such Distributors, being subject to the mutual approval of Vegiesafe and Pimi, which approval shall not be unreasonably
withheld) exp resses an interest in launching CIPC free potatoes or CIPC free potato products at any Retailer or by any
Distributor by requesting its supplier/s to use the Technology for potatoes or potato products, in order to produce or to supply
CIPC free potatoes or CIPC free potato products for its consumption, such request hereinafter referred to as a "Trigger
Event". The Parties will continue to operate the Joint Venture under the terms hereof and the JV Agreement, so long as such
Trigger Event occurs prior to December 31, 2009.


                                                       1
4. Scope of the J oint Venture

     4.1 The Joint Venture will market, sell and distribute the Technology throughout of the USA on an exclusive basis , and
         throughout Canada and Mexico on a non-exclusive basis. The Technology will be distributed under the Trademark/s or such
         other name/s as shall be mutually agreed upon by the Parties as well as under Earthbound LLC’s (“EB”), an affiliated co mpany
         of Vegiesafe u mbrella brand known as " Galapagos".

     4.2 The Joint Venture will have exclusivity for marketing, sales and distribution of the Technology for treat ment and storage of
         potatoes in the US A subject to Section 4.3 below. Treat ment and storage of other fruits and vegetables will be added to the
         Joint Venture in the future based upon the milestone and vision set forth in Exhi bi t B .

         Notwithstanding the above, the Parties agree that opportunities may co me along with respect to other fruits and vegetables. The
         Parties mutually agree that when these opportunities come along, the Parties will decide together whether or not to include such
         additional categories with in the scope of this Agreement.

         The Joint Venture will also market, sell and distribute the Technology for treatment and storage of potatoes in Canada and
         Mexico, but not on an exclusive basis.

     4.3 The exclusivity of the Joint Venture will be subject to fulfillment of certain milestones of annual sales set forth in the Exhi bit
         C.

         In case such milestones are not achieved, either party will have the right, but not the obligation to terminate the Joint Ven ture's
         exclusivity.

     4.4 The Joint Venture will relate in itially to process potatoes such as, French -Fries, Ch ips and fresh table potatoes. Once the Joint
         Venture has achieved the milestones set forth in Exhi bi t B , the Joint Venture's rights will be extended to other fruits and
         vegetables by mutual agreement, taking into account resources, funds availability, and vision for such expansion. Veg iesafe
         acknowledge that Pimi is in R&D stages for other usages of the Technology such as soil treat ment and disinfection, and grain
         treatment and other potential solutions and usages which are not part of the LOI/Agreement.

5. Parties share in the J oint Venture and i ts Management

     5.1 The parties' share in the Joint Venture will be: NC 70%, Vegiesafe 30% of all net revenues. "Net revenues": will include all
         sums received for the Technology regardless of whether such sums are paid in the form of a royalty o r pay ment fo r the sale of
         the Products or use of the Storage Protocol less any cost and expenses relating to achieving the revenues.

     5.2 The Joint Venture will have a board of directors. Pi mi will be entitled to have t wo directors and Vegiesafe will be entitled to
         have one director. Notwithstanding the above, all decisions regarding expenditures of Co mpany fund s relating only to the first
         investment of the $250,000 will require unanimous approval of the Board. Notwithstanding the above, expenses relat ing to the
         EPA approval of up to $100,000 as set forth in Exhi bi t E , efficacy tests/demonstration room/s of up to $50,000, and travel
         expenses to the US of Pimi staff or to Israel by Vegiesafe or the staff of its affiliated companies for working session of up to
         $50,000 will be considered as approved in advance, and will not require addit ional approval of the Board of the JV.

     5.3 At such time as the activit ies of the Jo int Venture warrant and upon mutual agreement o f the Parties, the Jo int Venture will
         emp loy a CEO and/or such other employees as may be necessary for the successful operation of the Joint Venture, including
         without limitation an agronomist who will be in touch with the customers in the USA.

     5.4 The Parties will have a meeting every quarter to review the busi-ness of the Joint Venture. Such meet ing may be in person or
         by conference call.

6. Pimi/NC Responsi bilities.

     6.1 NC and Pimi responsibilit ies and missions under the Joint Venture are as fo llo ws:

              6.1.1 Pimi/NC will give sub license to the Joint Venture for the use of the Technology, and all other intellectual property
                    and know-how including any research and develop-ment relating to the formula and any new product developed ("
                    IP ") for the term of the Joint Venture.

              6.1.2 Train ing of core personnel and technical support required for the act ivity in the US , until the Joint Venture will
                    engage sufficient personnel who will take upon itself the technical support for the installa -t ion and the treatment and
      Storage Protocol.

6.1.3 Receiv ing of all approvals and consents required for the activ ity o f the Joint Venture in the USA .

6.1.4 Installation of the in itial trials and demonstration rooms.

6.1.5 Pimi , its owners, officers, and managers agree (i) they will not, directly or indirectly, initiate contact with any
      Retailer o r Distributor for the purpose of proposing or soliciting a license, sales, or other agreement for any
      Products or the Technology that are exclusive to the Joint Venture hereunder, and (ii) if contacted by any such
      Retailer o r Distributor, Pi mi will refer such Retailer or Distributor to Joint Venture. In the event of a violation of
      this paragraph by Pimi , the Part ies agree that the measure of Vegiesafe's damages will be based on its share of net
      revenue set forth in Paragraph 5.1.


                                                     2
 7. Vegiesafe Res ponsibilities:

      7.1 Vegiesafe responsibilities and missions under the Joint Venture are as follows:

               7.1.1 Marketing and sales activities of the Joint Venture.

               7.1.2 Seeking to have a Retailer and/or major Distributor in the US, which will be mutually agreed upon by the parties, to
                     start treatment of a line of CIPC free potatoes or CIPC free potato products, by recommending its producer/s
                     and/or supplier/s to manufacture and supply such CIPC free pota-toes or CIPC free potato products; and following
                     up with a line of products for extending shelf life of fruits and vegetables with CropDefender, Pi mi products and
                     other products treated by or that include the Technology. Such next step will be discussed and mutually agreed
                     upon by the parties once the milestones set forth In Exh ibit B have been achieved.

               7.1.3 Assisting with the allocation of required personnel for the Joint Venture.

 8. Services and Goods provi ded by the Parties to the J oint Venture

      8.1 All services provided to the Joint Venture by any party will be charged to the Joint Venture at cost basis.

      8.2 Pimi will sell the Products to the Joint Venture on cost basis including but not limited to any external work done and
          transportation.

 9. Financing the Joint Venture

      9.1 Vegiesafe will invest in the Joint Venture an aggregated amount of $250,000 wh ich will be used for expenses reflected in a
          budget prepared for the Joint Venture and approved by Vegiesafe and Pimi. The budget shall include such items as EPA
          approval, flights, accommodations, legal/accounting and first Potato treatments tests, etc. The above sum will be provided on
          an as required basis according to a working quarterly budget prepared by NewCo or Pimi and as shall be determined by the
          board of directors of the Joint Venture in accordance with section 5.2 above. Vegiesafe will deposit $40,000 with Pimi on or
          before January 26, 2009 which will be an advanced of the above amount out of which the sum of $12,400 wh ich Pimi has
          already expended will be reimbursed to Pimi. Once this amount has been used Vegiesafe will deposit additional amount of
          $40,000 and so forth. Decision as to costs and expenses relating to the expending the above investment will be taken by mutua l
          consent.

      9.2 The Joint Venture will open a bank account when practical. Signature rights in the Joint Venture bank account will be as
          decided by the Joint Venture Board of Directors.

      9.3 Any additional investment in excess of the $250,000 set forth in section 9.1 above shall be contributed by the parties to the
          Joint Venture upon the mutual consent of the parties taking into account the Joint Venture's business and needs and will be p aid
          to the Joint Venture as follows: 70% to be paid by Pimi and 30% to be paid by Veg iesafe.

      9.4 Breach by Veg iesafe of its obligation to invest under section 9.1 above, will be considered a fundamental breach of this LOI
          and/or the JV Agreement and will enable Pimi or NC to terminate the JV Agreement or this LOI by an advance written notice
          to Vegiesafe of its default under which it will provide Vegiesafe with a period of 15 days from the date of receipt of Pimi o r
          NC’s notice to cure its default of pay ment of any of the installments payable under section 9.1. In case of termination in the
          above circumstance Vegiesafe will not be entitled to receive any compensation or the consideration under section 11.4 herein
          under.

      9.5 A breach by Vegiesafe of its obligations to invest in the Joint Venture under section 9.1 above shall not af fect EB’s rights with
          respect to EB’s investment in Pimi under Section 10.

10. Vegiesafe investment in Pimi

     10.1 EB, an affiliate of Vegiesafe will invest directly in Pimi Agro CleanTech Ltd $300,000 at a valuation of $8M p re -money (" EB
          Investment ") for 226,642 Ordinary Shares of 0.01 NIS each representing 3.61% of the issued capital of Pimi at the time of
          investment. The investment will be paid to Pimi in tranches as follo ws: first tranche of $60K will be paid on the 15 th o f March
          2009. The balance of $240,000 will be paid in four installments as follo ws: $60,000 on the 15 th June, 2009, $90,000 on 15 th of
          September, 2009 and $90,000 on the 15 th of January 2010. EB will receive the allocated shares pro rata to the EB Investment
          against each payment of the EB Investment. Attached to this LOI as Exhi bi t D is the Term Sheet fo r EB investment in Pimi.
    10.2 In the event Pimi raises funds from a VC, or fro m an institutional investor ("The Outside Investment"), or will issue shares in
         an IPO, for a valuation which is higher than $8M illion then EB will have the option to pay the balance of the EB Investmen t
         prior to the funding of the Outside Investment. If EB, in its sole discretion elects not to pay the balance of the EB Investment at
         such time, it will then lose its right to pay the balance of the EB Investment and will not receive the balance of the sha res, and
         will be left only with those shares that have been already allocated under paragraph 10.1 above.

    10.3 In case that prior to the first payment of the Investment by EB, there will be a conversion of the shares of Pimi to shares in a
         US co mpany, as a part of the plan to register the shares of the US company on the NASDAQ OTC/ BB, then instead of shares
         in Pimi, EB will receive shares in the US co mpany at the same rate of conversion which applies to all other holders of the
         Ordinary Shares 0.01 NIS each of Pimi.

    10.4 Breach by EB of its obligation to invest in Pimi under section 10.1 above, will be considered a fundamental breach of this LOI
         and/or the JV Agreement by Veg iesafe and will enable Pimi or NC to terminate the JV Agreement or this LOI by an advance
         written notice to Vegiesafe of its default and providing Vegiesafe with a period of 15 days from the date of receipt of Pimi or
         NC’s notice to cure its default of payment of any of the installments payable under section 10.1. In case of termination in the
         above circumstance Vegiesafe will not be entitled to receive any compensation or the consideration under section 11.4 herein
         under.

11. Termination of the LOI or the Joint Venture

    11.1 Either Party shall have the right to terminate this LOI and/or the Joint Venture and the JV Agreement if the Trigger Event, as
         that term is defined in Sect ion 3.1, does not occur by December 31, 2009. Notice of the exercise of the right to terminate th is
         LOI and/or the Joint Venture and the JV Agreement sh all be sent to the other party as provided in Section 17 within 60 days
         after December 31, 2009. In the event of a termination as provided in this Sect ion 11.1, Vegiesafe acknowledges that its
         investment made in the Joint Venture will not be returned, except for its investment which was used for acquiring the EPA
         approval for registration of the Technology in the US including without limitation the expenses set forth in Exh ib it E including
         expenses added to the EPA registration budget after the date hereof and such additional direct expenses associated with EPA
         registration if actually incurred.


                                                                  3
     11.2 Pimi and/or NC shall have the right but not the obligation to terminate the exclusivity of the Jo int Venture, if the mileston es set
          forth in Exh ibit C (“Milestones”) are not achieved. If, however, good faith negotiations with Retailers or Distributors, tha t are,
          in both parties good faith determination, reasonably expected to achieve the Milestones are ongoing at the time of any
          Milestone deadline, the parties will discuss the potential of such negotiations and give consideration to such negotiations p rior
          to terminating the exclusivity of the Jo int Venture for failure to achieve a Milestone.

     11.3 Upon termination of the Jo int Venture the Technol ogy and EPA approval and any other license or consent, will remain the
          sole property of Pimi and/ or NC.

     11.4 Upon termination o f the Jo int Venture NC or Pi mi , if NC has not been formed will continue to pay Vegiesafe its share of
          revenue fro m the sales as agreed under the JV Agreement as long as Vegiesafe continues to provide services required under
          any agreement to which it is a party.

     11.5 Upon termination of the Joint Venture, all rights in and to EB's Galapagos brand and such customized trademark, other than
          the actual Licensed Mark used in conjunction with the Products, will belong exclusively to EB . Pimi and/or NC shall o wn all
          right, t itle and interest in and to the underlying Technology, IP, and to the under-lying artwork in the brand collateral produced
          by the Joint Venture, including but not limited to, any Product specifications, copyrights, names, seals, logos and art-work
          developed in connection therewith, Pimi agrees it will not use, either during or after the term of this LOI or the JV Agreement,
          any intellectual property, including but not limited to artwork and designs, created by Vegiesafe using or connected to the
          Technology or Licensed Mark fo r any purpose outside the scope of this LOI or the Jo int Venture without the prior written
          consent of Vegiesafe upon such terms as are agreeable to Vegiesafe .

12. Confi dentiality and non Compete

     12.1 The parties will keep their relationship confidential unless mutually pre -agreed in writ ing or required under any court order and
          or law or regulations of the USA or Israel.

     12.2 Any information disclosed by one Party to the other under this LOI or in connection with the Joint Venture will be kept
          confidential and will be used only for the mutual benefit of the Parties in furtherance of the purpose of the Joint Venture.

     12.3 Vegiesafe will not be involved in any other solution for fruit and vegetables that directly co mpetes with the Technology for
          five (5) years after termination of th is LOI or the Jo int Venture.

     12.4 During the term of this LOI and the JV Agreement, neither party shall engage in any independent business enterprise in the US
          without the other in connection with any business enterprise that sells, pro motes or markets products that are co mpetit ive with
          the Technology. Notwithstanding anything to the contrary set forth above, nothing contained herein shall preclude Vegiesafe
          fro m entering into a business relation-ship with Vego LLC wh ich is extending shelf life for processed fruit and
          vegetables. Vegiesafe shall be permitted to enter into any business relationship with Vego LLC even if the subject matter of
          such business competes with the Technology or other Pimi Products subject to Vego LLC not using the Technology.

     12.5 The Parties agrees not to solicit the other Party's employees to work directly or indirectly for them o r hire any former
          emp loyees of the other Party for a period of three (3) years after the former emp loyee's emp loyment terminated.

     12.6 The provisions of this Section 12 shall survive the termination of this LOI .

13. Sale of Brand or Pi mi.

    The Joint Venture Agreement will provide the in case of sale of the JV o r the JV operat ions relating to fruit and vegetables by NC or
    Pimi, PIMI’s share will be 70% and Vegiesafe’s share will be 30% of the consideration of such sale, provided the Trigger Event has
    occurred. The above entitlement is only in case that Vegiesafe has not received consideration for its part in the JV direct ly which is
    intended to represent 30% of the total consideration for such sale.

14. Goodwill.

     14.1 The Parties acknowledge that any intellectual property, includ ing but not limited to artwork and designs, created by
          Vegiesafe using or connected to the Technology or Licensed Mark is created for the mutual benefit and profit o f the Jo int
          Venture. Vegiesafe retains the perpetual right to use, solely as an historical example of its advertising, any advertising and
          promotional materials produced by or for Pimi or the Joint Venture hereunder which incorporate the Licensed Mark, provided
          that such use will be exclusively for award consideration and non -commercial internal and port-folio purposes.
     14.2 Pimi acknowledges that the Galapagos brand is solely the property of EB. Pimi shall not, at any t ime, regard less of the
          duration of this LOI , dispute or contest, directly or indirectly, EB's ownership of the Galapagos brand. Pimi recognizes the
          value of the goodwill associated with the Galapagos brand and agrees that all rights in the Galapagos Brand and goodwill
          associated with it, including all goodwill generated by use of the Galapagos brand in connection with the sale of the
          Technology belong to EB. Pimi acknowledges that any intellectual property created by EB using the Galapagos brand is
          created for the exclusive benefit and profit of EB. Pimi agrees it will not use, either during or after the term of this LOI or the
          JV Agreement, for any purpose, any intellectual property, including but not limited to artwork and designs, created by
          Vegiesafe using or connected to the Galapagos brand.

15. Arbitrati on

 Parties agree that any controversy or claim arising out of or relating to this LOI , the Joint Venture or the JV Agreement or any breach
 or alleged breach of the provi-sions of this LOI or the JV Agreement, shall be settled by arbitration submitted to the American
 Arbitration Association, to be conducted, in New York City, New York, and judgment upon the award rendered may be entered in any
 court having jurisdiction thereof. The arbitrat ion shall be conducted in accordance with the then current commercial ru les of the
 American Arbit ration Association.

  In the event of the actual or threatened breach of this LOI or the JV Agreement, the non-breaching Party shall be entitled to a
  preliminary restraining order or injunction restraining the breaching Party from violating its provisions. Nothing contained in this LOI
  or the JV Agreement shall be construed to prohibit the non -breaching Party fro m pursuing any other availab le remedies fo r such breach
  or threatened breach, including the recovery of damages. Any recourse by a Party to a court for interim or provisional relief shall not be
  deemed incompatib le with the agreement to arbitrate or a waiver of the right to arbitrate.

16. Reports and transparency

    NC, Vegiesafe and Pimi will report to each other on any meeting, and/or connection and/or relations with Retailer or Distribu tor as
    well as potential Retailer or Distributor, as well as any technical data or trials made in the US or Canada or Mexico, and a ny other
    territory.


                                                                   4
    17. Joint Venture/Joint Venture Agreement

          17.1 The parties will instruct their lawyers to work on a JV Agreement which will incorporate and reflect the terms and conditions
               of this LOI.

          17.2 The parties will use their best commercial effo rts to complete and sign the JV Agreement by no later than February 15, 2009. If
               the JV Agreement is not signed by January 15, 2009 this LOI shall be the JV Agreement.

    18. Notices

      All notices and other co mmunications pursuant to this LOI shall be sent by telefax with confirmat ion or by overnight courier service to
      the other Party at the address stated above. Each Party's address may be changed by notice to the other party in accor-dance with this
      Paragraph.

      Any and all notices sent to Vegiesafe shall also require that a copy be sent to Kamerman & Soniker P.C., 470 Park Avenue South, 12th
      Floor South, New York, New York 10016 fax 212-400-4935. Any and all notices sent to Pimi shall also require that a copy be sent to
      Advocate Eitan Sh mueli, Sadot & Co Law offices of 12 Abba Hillel St. Ramat -Gan, Israel fax 972-3-6122377 . In the event of
      delivery by overnight courier, the date of delivery is deemed to be the next business day (two business days for internationa l delivery)
      after deposit to the overnight courier. In the event of delivery by confirmed telefax, the date of delivery is deemed to be the date of
      transmission if trans mission occurs before 4:00 PM at the location of receipt of the notice, otherwise the next bus iness day.

    19. Executi on/Counterparts.

        This LOI (or any subsequent amendment or addendum thereto) may be executed in counterparts by the Parties with each such
        counterpart then being considered one and the same and all of which shall constitute one and the same agreement. A signed e-mail or
        telefaxed copy of this LOI (o r any subsequent amendment or adden-dum thereto) shall have the same force and effect as an original
        signed copy of this LOI .

        In witness whereof the Part ies have signed this LOI on the 20 th of January 2009.


Vegiesafe LLC                                                               Pimi Agro CleanTech Ltd.


/s/ Jack Dereck                                                             /s/ Eitan Sh mueli
Jack Dereck                                                                 Eitan Sh mueli Director
7/22/2009
                                                                            Alan Carmed Chairman




                                                                       5
                                                                EB's consent

We the undersigned Earthbound LLC agree to terms of this LOI and to be bound by the terms of section 10 above. We also agree to grant the
JV and/or Pimi and/or the NC the right to use our brand name " Galapagos" pursuant to the terms of this LOI and for the purposes of the JV, as
long as the JV or the partnership under it will be in force, free of any charge and without any consideration to us.

Earthbound LLC

By : Jack Dereck

Signature: /s/ Jack Dereck

Date: 1/22/2009


                                                                      6
                                Exhi bit A

                   Patents and Patent Applications

COUNTRY   Patent Register No.                   Application No.   Status
  U.S.A        6,797,302                                          Granted
               6,946,155
               7,147,872
 Canada                                              2,338,718    Pending




                                    7
                                                                  Exhi bit B

                                           Milestones for other fruits and vegetables to be added

    The Joint Venture has achieved sale target of 300,000 tons potatoes using the Technology.

Vision:

Vegetables: Cabbage, On ions, Mushrooms, Sweet Potatoes, carrots, Broccoli cau liflo wer.

Fruits: Citrus, Apples , Pear, Peach.

Priority will be decided according to market informat ion and demand as well as product development.



                                                                      8
                                                             Exhi bit C

                                               Milestones to maintain exclusivity:

1. Trigger Event until December 31, 2009.

2. Entering a CIPC free branding program with 2 Retailers or Distributors before crop season started Sep 2010.

3. Treat ment of 150,000 tons of potatoes in season which starts on Sep. 2011.

4. Treat ment done to 350,000 tons of potatoes in season starts on Sep. 2012.




                                                                 9
     Exhi bit D

Term Sheet and POA




        10
                                                                Exhi bit E

            EPA Registration Budget
Item        Descripti on                                                        Budget (USD)   payment
       1                                 phys/chem properties                      15,000           Q1 09
       2                                     Acute toxicity                        14,000           Q1 09
       3                                         EPA fee                           4,200            Q2 09
       4                     Registration in all states including Californ ia      2,750            Q4 09
       5    Chemical characterization of hydrogen peroxide                         15,000           Q1 09
                        WRA (Pimi Consultant) to prepare registration dossier
       6
                                        and submit to US EPA                       2,625             Paid
                                 WRA to prepare registration dossier
       7
                                        and submit to US EPA                       2,625            Q2 09
       8                        WRA to prepare and submit a petition              4,125.00          Paid
       9                        WRA to prepare and submit a petition              4,125.00          Q2 09
                                         WRA pre-reg istration
       10
                                         conference with EPA                        850              Paid
                                         WRA pre-reg istration
       11
                                         conference with EPA                        850             Q1 09
                                               Unforeseen                          10,000
                                                  Total                            76,150




                                                                   11
Exhi bit 10.29


NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISA BLE HA VE BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON A N EXEM PTION FROM REGISTRATION UNDER THE SECURITIES A CT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, A CCORDINGLY, MA Y NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEM ENT UNDER THE SECURITIES A CT OR PURSUANT TO AN A VA ILABLE EXEM PTION FROM , OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREM ENTS OF THE SECURITIES A CT A ND IN A CCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGA L OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTA NCE OF WHICH SHA LL BE REASONA BLY A CCEPTA BLE TO THE COM PANY. THIS SECURITY
AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MA Y BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN A CCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

Warrant Certificate No. 1 b

                                                      PIMI AGRO CLEANTECH, INC.

                                                    AMENDED AND RES TATED
                                                COMMON STOCK PURCHAS E WARRANT

                                                To Purchase 145,985 Shares of Co mmon Stock o f

 This amended and restated Warrant (“ Warrant ”) is hereby issued on July 29, 2009 to amend replace and supersede the original warrant
(warreant Nu mber 1a) originally issued to Earhbound LLC on June 7, 2009.

Pimi Agro Cleantech Inc. cert ifies that, for value received, EARTHBOUND LLC (the “ Holder ”), is entitled, upon the terms and subject to the
limitat ions on exercise and the conditions hereinafter set forth, at any time on or after the date hereof (the “ Initial Exercise Date ”) and on or
prior to the close of business on August 31, 2009 (the “ Termination Date ”) but not thereafter, to subscribe for and purchase from PIM I A GRO
CLEANTECH, INC., a Delaware corporation (the “ Co mpany ”), up to 145,985 shares (the “ Warrant Shares ”) of Co mmon Stock, par value
$.01 per share, of the Co mpany (the “ Co mmon Stock ”). The purchase price o f one share of Co mmon Stock under this Warrant shall be equal
to the Exercise Price, as defined in Section 2(b) .

         Section 1 .                     Recitals .

                 a)       On January 20, 2009 the Co mpany entered into an investment agreement with Holder , pursuant to which Holder
agreed to invest an aggregate of $300,000.00 in the Co mpany, payable in mu ltip le traunches. As of the Initial Exercise Date, Ho lder has
invested $60,000 under the Investment Agreement.

                   b)       The Co mpany is issuing this Warrant in furtherance of the Investment Agreement and as further incentive to Holder
to increase its investment in the Co mpany.

         Section 2 .                     Exercise .

                  Exercise of Warrant . Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any
         time or t imes on or after the In itial Exercise Date and on or before the Termination Date by delivery to the Co mpany of a dul y
         executed facsimile copy of the Notice of Exercise form annexed hereto (o r such other office or agency of the Co mpany as it may
         designate by notice in writing to the registered Holder at the address of such Holder appearing on the books of the Compan y); and,
         within three (3) Trading Days of the date said Notice of Exercise is del ivered to the Company, the Co mpany shall have received
         payment of the aggregate Exercise Price of the shares thereby purchased by wire transfer or cashier’s check drawn on a United States
         bank. Notwithstanding anything herein to the contrary, the Holder s hall not be required to physically surrender this Warran t to the
         Co mpany until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in fu ll, in
         which case, the Holder shall surrender this Warrant to the Co mpany for cancellat ion within three (3) Trading Days of the date the final
         Notice of Exercise is delivered to the Co mpany. Partial exercises of this Warrant resulting in purchases of a portion of the total
         number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares
         purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Co mpany shall
         maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Co mpany shall deliver any
         objection to any Notice of Exercise within t wo (2) Trading Days of receipt of such notice. THE HOLDER AND ANY ASSIGNEE,
         B Y ACCEPTANCE OF THIS WARRANT, ACKNOWLEDGE AND AGREE THAT, B Y REAS ON OF THE PROVISIONS
         OF THIS PARAGRAPH, FOLLOWING THE PURCHAS E OF A PORTION OF THE WARRANT S HARES HER EUNDER,
         THE NUMB ER OF WARRANT S HARES AVAILABLE FOR PURCHAS E HER EUNDER AT ANY GIVEN TIME MAY B E
         LESS THAN THE AMOUNT S TATED ON THE FACE HEREOF .
1
         Exercise Price . The exercise price per share of the Co mmon Stock under this Warrant shall be $1.37 (the “ Exercise Price ”).

         Mechanics of Exercise .

                           Authorizat ion of Warrant Shares . The Co mpany covenants that all Warrant Shares wh ich may be issued
                  upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights
                  represented by this Warrant, be duly authorized, valid ly issued, fully paid and nonassessable and free fro m all taxes,
                  liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer
                  occurring contemporaneously with such issue).

                           Delivery of Ce rtificates Upon Exercise . Cert ificates for Warrant Shares purchased hereunder shall be
                  transmitted by the transfer agent of the Company to the Holder by credit ing the account of the Holder’s prime b roker
                  with the Depository Trust Co mpany through its Deposit/Withdrawal at Custodian (“ DWAC ”) system if the
                  Co mpany is a participant in such system, and otherwise by delivery to the address specified by the Holder in the
                  Notice of Exercise, within five (5) Trad ing Days from the delivery to the Co mpany of the Notice of Exercise form,
                  surrender of this Warrant (if required) and payment of the aggregate Exercise Price as set forth above (“ Warrant
                  Share Delivery Date ”). Th is Warrant shall be deemed to have been exercised on the date the Exercise Price is
                  received by the Co mpany. The Warrant Shares shall be deemed to have been issued, and Holder or any other person
                  so designated to be named therein shall be deemed to have become a holder of record of such shares for all
                  purposes, as of the date the Warrant has been exercised by payment to the Co mpany of the Exercise Price and all
                  taxes required to be paid by the Holder, if any, have been paid.

                            Delivery of New Warrants Upon Exercise . If this Warrant shall have been exercised in part, the Co mpany
                  shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the
                  certificate or cert ificates representing Warrant Shares, deliver to Ho lder a new Warrant evidencing the rights of
                  Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other
                  respects be identical with this Warrant.

                            Rescission Rights . If the Co mpany fails to cause its transfer agent to transmit to the Holder a certificate or
                  certificates representing the Warrant Shares pursuant to this Section 2 by the Warrant Share Delivery Date, then the
                  Holder will have the right to rescind such exercise.

                            Obligation Absolute . The Corporation’s obligations to issue and deliver the certificates representing the
                  Warrant Shares upon exercise of the Warrant in accordance with the terms hereof are absolute and unconditional,
                  irrespective of any action or inaction by the Holder to enforce the same, a ny waiver or consent with respect to any
                  provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff,
                  counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other
                  Person of any obligation to the Corporation or any violation or alleged violation of law by the Holder or any other
                  person, and irrespective of any other circu mstance which might otherwise limit such obligation of the Corporation to
                  the Holder in connection with the issuance of such certificates representing the Warrant Shares. The Corporation
                  shall issue the certificates representing the Warrant Shares upon a properly noticed exercise.

                          No Fract ional Shares or Scrip . No fractional shares or scrip representing fractional shares shall be issued
                  upon the exercise of this Warrant. As to any fraction of a share wh ich Holder would otherwise be entit led to
                  purchase upon such exercise, the Co mpany shall round up to the next whole share.

                            Charges, Taxes and Expenses . Issuance of certificates for Warrant Shares shall be made without charge to
                  the Holder or other incidental expense in respect of the issuance of such certificate, and such certificates shall be
                  issued in the name of the Holder or in such name or names as may be directed by the Holder; provided , however ,
                  that in the event certificates for Warrant Shares are to be issued in a name other than the name of the Holder, this
                  Warrant when surrendered for exercise shall be acco mpanied by the Assignment Form attached hereto duly executed
                  by the Holder; the assignment shall be subject to Section 4 below, and the Co mpany may require, as a condition
                  thereto, the payment of a sum sufficient to reimbu rse it for any transfer tax incidental thereto.

                           Closing of Books . The Co mpany will not close its stockholder books or records in any manner wh ich
                  prevents the timely exercise of this Warrant, pursuant to the terms hereof.

Section 3 .                     Certain Adjustments .
         Stock Dividends and Splits . If the Co mpany, at any time while this Warrant is outstanding: (i) pays a stock dividend or
otherwise makes a distribution or distributions on shares of its Co mmon Stock or any other equity or equity equivalent securities
payable in shares of Co mmon Stock (wh ich, for avoidance of doubt, shall not include any shares of Co mmon Stock issued by the
Co mpany upon exercise of this Warrant), provided that this clause (i) subdivides outstanding shares of Co mmon Stock into a la rger
number of shares, (ii) co mbines (including by way o f reverse stock split) outstanding shares of Co mmon Stock into a smaller number
of shares, or (iii) issues by reclassification of shares of the Common Stock any shares of capital stock of the Co mpany, then in each
case the Exercise Price shall be multip lied by a fraction of wh ich the numerator shall be the number of shares of Commo n Stock
(excluding treasury shares, if any) outstanding immed iately before such event and of which the denominator shall be the numbe r of
shares of Co mmon Stock outstanding immed iately after such event and the number of shares issuable upon exercise of this Warrant
shall be proportionately adjusted. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the
record date for the determination of stockholders entitled to receive such dividend or d istribution and shall beco me effectiv e
immed iately after the effective date in the case of a subdivision, comb ination or re-classification.




                                                             2
         Fundamental Transaction . If, at any time while this Warrant is outstanding, (i) the Co mpany effects any merger or
consolidation of the Company with or into another Person, (ii) the Co mpany effects any sale of all or substantially all of it s assets in
one or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Company or another Person) is
completed pursuant to which holders of Co mmon Stock are permitted to tender or exchange their shares for other securities, ca sh or
property, or (iv) the Co mpany effects any reclassification of the Co mmon Stock or any co mpulsory share exchange pursuant to which
the Co mmon Stock is effectively converted into or exchanged for other securit ies, cash or property (in any such case, a “ Fundamental
Transaction ”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share
that would have been issuable upon such exercise immed iately prior to the occurrence of such Fundamental Transaction, at the option
of the Holder, (a) upon exercise of this Warrant, the number of shares of Common Stock of the successor or acquiring corporation o r
of the Company, if it is the surviving corporation, and any additional consideration (the “ Alternate Consideration ”) receivable upon
or as a result of such reorganization, reclassification, merger, consolidation or disposition of assets by a Holder of the nu mber of
shares of Co mmon Stock for which this Warrant is exercisable immediately prior to such event or (b) if the Co mpany is acquired in an
all cash transaction, cash equal to the value of this Warrant as determined in accordance with the Black -Scholes option pricing
formula. For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adju sted to apply to such
Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Co mmon Stock in su ch
Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Considerat ion in a reasonable
manner reflecting the relative value of any different co mponents of the Alternate Consideration. To the extent necessary to effectuate
the foregoing provisions, any successor to the Co mpany or surviving entity in such Fundamental Trans action shall issue to the Ho lder
a new warrant consistent with the foregoing provisions and evidencing the Holder’s right to exercise such warrant into Alternate
Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effec ted shall include terms requiring any
such successor or surviving entity to comply with the provisions of this Section 3(b) and insuring that this Warrant (or any such
replacement security) will be similarly ad justed upon any subsequent transaction analogo us to a Fundamental Transaction.

          Notice to Allow Exercise by Holder . If (A) the Co mpany shall declare a div idend (or any other distribution in whatever
form) on the Co mmon Stock; (B) the Co mpany shall declare a special nonrecurring cash dividend on or a redemption of the Common
Stock; (C) the Co mpany shall authorize the granting to all holders of the Co mmon Stock rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any rights; (D) the approval of any stockholders of the Company shall be
required in connection with any reclassificat ion of the Co mmon Stock, any consolidation or merger to which the Co mpany is a p arty,
any sale or transfer of all or substantially all of the assets of the Company, of any compulsory sha re exchange whereby the Common
Stock is converted into other securities, cash or property; (E) the Co mpany shall authorize the voluntary or involuntary diss olution,
liquidation or winding up of the affairs of the Co mpany; then, in each case, the Co mpany sh all cause to be mailed to the Ho lder at its
last address as it shall appear upon the Warrant Register of the Co mpany, at least ten (10) calendar days prior to the applic ab le record
or effective date hereinafter specified, a notice stating (X) the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of wh ich the holders of the Co mmon Stock of
record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (Y) the date on wh ich such
reclassification, consolidation, merger, sale, transfer or share exchange is expected to beco me effective o r close, and the d ate as of
which it is expected that holders of the Common Stock o f record shall be entitled to exchange their shares of the Common St ock for
securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exc hange;
provided that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the co rporate
action required to be specified in such notice. The Ho lder is entitled to exercise this Warrant during the ten (10) day period
commencing on the date of such notice to the effective date of the event triggering such notice.

Section 4 .                      Transfer of Warrant .

          Transferability . Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d)
hereof, this Warrant and all rights hereunder (including, without limitation, any reg istration rights) are transferable, in whole or in part,
upon surrender of this Warrant at the principal office of the Co mpany or its designated agent, togeth er with a written assignment of
this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay
any transfer taxes payable upon the making o f such transfer. Upon such surrender and, if required, such payment, the Co mpany shall
execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denomination or denominatio ns
specified in such instrument of assignment, and shall issue to the assignor a new Wa rrant evidencing the portion of this Warran t not so
assigned, and this Warrant shall pro mptly be cancelled. A Warrant, if properly assigned, may be exercised by a new holder for the
purchase of Warrant Shares without having a new Warrant issued.

          New Warrants . This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid
office o f the Co mpany, together with a written notice specifying the names and denominations in which new Warrants are to be
issued, signed by the Holder or its agent or attorney. Subject to compliance with Sect ion 4(a) , as to any transfer which may be
involved in such division or combination, the Co mpany shall execute and deliver a new Warrant or Warrants in exchange for the
Warrant or Warrants to be divided or combined in accordance with such notice.
         Warrant Reg ister . The Co mpany shall register this Warrant, upon records to be maintained by the Co mpany for that purpose
(the “ Warrant Reg ister ”), in the name of the record Ho lder hereo f fro m time to t ime. The Co mpany may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.

         Transfer Restrictions . If, at the time o f the surrender of this Warrant in connection with any transfer of this Warrant, the
transfer of this Warrant shall not be registered pursuant to an effective registration statement under the Securities Act and under
applicable state securities or blue sky laws, the Co mpany may require, as a condition of allowing such transfer (i) that the H older or
transferee of this Warrant, as the case may be, furnish to the Company a written opinion of counsel (which opinion shall b e in form,
substance and scope customary for opinions of counsel in co mparab le transactions) to the effect that such transfer may b e mad e
without registration under the Securit ies Act and under applicable state securities or blue sky laws, (ii) that the ho lder or transferee
execute and deliver to the Co mpany an investment letter in form and substance acceptable to the Co mpany and (iii) that the tr ansferee
be an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8) p ro mulgated under the Securities Act or a
“qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.




                                                               3
Section 5 .                     Transfer of Securities .

         a)       Th is Warrant and the Warrant Shares and any shares of capital stock received in respect thereof, whether by reason
of a stock split or share reclassification thereof, a stock dividend thereon, or otherwise, shall not be transferable except upon
compliance with the provisions of the Securities Act of 1933, as amended (the “ Securities Act ”) and applicable state securities laws
with respect to the transfer of such securities. The Holder, by acceptance of this Warrant, ag rees to be bound by the provisions of
Section 4 hereof and to indemn ify and hold harmless the Co mpany against any loss or liability arising fro m the disposition of this
Warrant or the Warrant Shares issuable upon exercise hereof or any interest in eithe r thereof in violation of the provisions of this
Warrant.

         b)       Each cert ificate for the Warrant Shares and any shares of capital stock received in respect thereof, whether by reason
of a stock split or share reclassification thereof, a stock dividend thereon or otherwise, and each certificate for any such securities
issued to subsequent transferees of any such certificate shall (unless otherwise permitted by the provisions hereof) be stamp ed or
otherwise imprinted with a legend in substantially the fo llo wing form:

         “NEITHER THIS WARRANT NOR THE SHA RES OF COMM ON STOCK ISSUA BLE UPON EXERCISE
         HEREOF HA VE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AM ENDED, OR ANY
         APPLICABLE STATE SECURITIES LAW AND NEITHER MA Y BE SOLD OR OTHERWISE
         TRANSFERRED UNTIL (I) A REGISTRATION STATEM ENT UNDER SUCH SECURITIES ACT AND SUCH
         APPLICABLE STATE SECURITIES LAWS SHA LL HA VE BECOM E EFFECTIVE WITH REGA RD
         THERETO, OR (II) THE COMPANY SHA LL HA VE RECEIVED A WRITTEN OPINION OF COUNSEL
         ACCEPTA BLE TO THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER SUCH SECURITIES
         ACT A ND SUCH APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED IN CONNECTION W ITH
         SUCH PROPOSED TRANSFER.”

Section 6 .                     Miscellaneous .

        No Rights as Shareholder Until Exercise . This Warrant does not entitle the Holder to any voting rights or other rights as a
shareholder of the Co mpany prior to the exercise hereof as set forth in Section 2 .

          Loss, Theft, Destruction or Mutilation of Warrant . The Co mpany covenants that upon receipt by the Co mpany of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemn ity or security reasonably satisfactory to it (wh ich, in the case of the
Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate , if
mutilated, the Co mpany will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in
lieu of such Warrant or stock certificate.

         Saturdays, Sundays, Holidays, etc . If the last or appointed day for the taking of any act ion or the exp iration of any right
required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next
succeeding Business Day.

         Authorized Shares . The Co mpany covenants that, during the period the Warrant is outstanding, it will res erve fro m its
authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the
exercise of any purchase rights under this Warrant. The Co mpany further covenants that its issuance of this Warrant shall constitute
full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessa ry certificates
for the Warrant Shares upon the exercise of the purchase rights under this Warrant. The Co mpany will take all such reasonable action
as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law o r
regulation, or of any requirements of the Trading Market upon which the Co mmon Stock may be listed, if applicable.

 Before taking any act ion wh ich would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable
or in the Exercise Price, the Co mpany shall obtain all such authorizations or exempt ion s thereof, or consents thereto, as may be
necessary from any public regulatory body or bodies having jurisdiction thereof.

        Jurisdiction . All questions concerning the construction, validity, enforcement, venue, ju risdiction, and interpretation of this
Warrant shall be determined in accordance with the provisions of the Purchase Agreement.

         Restrictions . The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered,
will have restrictions upon resale impos ed by state and federal securities laws.
          Nonwaiver and Expenses . No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder
shall operate as a waiver of such right or otherwise prejudice Ho lder’s rights, powers or remedies, notwithstanding the fact that all
rights hereunder terminate on the Termination Date. If the Co mpany willfu lly and knowingly fails to comp ly with any provision of
this Warrant, wh ich results in any material damages to the Holder, the Co mpany shall pay to Holder such amounts as shall be
sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys ’ fees, including those of appellate
proceedings, incurred by Holder in collecting any amounts due p ursuant hereto or in otherwise enforcing any of its rights, powers or
remedies hereunder.

          Notices . Any notice, request or other document required or permitted to be given or delivered to the Ho lder by the Co mpany
shall be delivered in accordance with the notice provisions of the Purchase Agreement.

          Limitation of Liab ility . No provision hereof, in the absence of any affirmative action by Holder to exercise this Warrant to
purchase Warrant Shares, and no enu merat ion herein of the rights or privileges of Holder, shall give rise to any liab ility of Holder for
the purchase price of any Co mmon Stock or as a stockholder of the Co mpany, whether such liability is asserted by the Company or by
creditors of the Co mpany.

          Remedies . Holder, in addit ion to being entit led to exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Warrant. The Co mpany agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a b reach by it of the provisions of this Warrant and hereby agrees to waive and not to
assert the defense in any action for specific performance that a remedy at law would be adequate.

         Successors and Assigns . Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby
shall inure to the benefit of and be binding upon the successors of the Company and the successors and permitted assigns of
Holder. The p rovisions of this Warrant are intended to be for the benefit of all Holders fro m t ime to time of this Warrant and shall be
enforceable by any such Holder or holder of Warrant Shares.

        Amend ment . Th is Warrant may be modified or amended or the provisions hereof waived only with the written consent of
the Co mpany and the Holder.

         Severability . Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and
valid under applicab le law, but if any provision of this Warrant shall be prohibited by or invalid under applicab le law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the
remain ing provisions of this Warrant.

        Headings . The headings used in this Warrant are for the convenience of reference only and shall not, fo r any purpose, be
deemed a part of this Warrant.


                                                   ********************




                                                                4
         IN WITNESS WHEREOF, the Co mpany has caused this Warrant to be executed by its officer thereunto duly authorized.


Dated: Ju ly 29, 2009

PIMI AGRO CLEANTECH, INC.


/s/ Youval Saly
Name:Youval Saly
Title: Ch ief Executive Officer




                                                                   5
                                                          NOTICE OF EXERCIS E

TO:              PIMI A GRO CLEA NTECH, INC. (THE “COM PANY”)

                 The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached
Warrant, and tenders herewith payment of the exercise price in fu ll, together with all applicable transfer taxes, if any.

                  Payment will be made in lawful money of the United States.

                   Please issue a certificate or cert ificates representing said Warrant Shares in the name of the undersigned or in such other
name as is specified below:

_______________________________



The Warrant Shares shall be delivered to the fo llo wing DWAC Account Number or by physical delivery of a certificate to:

_______________________________

_______________________________

_______________________________

 (4) Accredited Investor . The undersigned certifies that it is an “accredited investor” as defined in Regulation D pro mu lgated under the
Securities Act of 1933, as amended.

[SIGNATURE OF HOLDER]

Name of Investing Entity:
Signature of Authorized Signatory of Investing Entity :
Name of Authorized Signatory:
Title of Authorized Signatory:
Date:




                                                                      6
                                                         ASSIGNMENT FORM

                                                 (To assign the foregoing warrant, execute
                                                this form and supply required informat ion.
                                               Do not use this form to exercise the warrant.)




FOR VA LUE RECEIVED, _________ shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to
_________________________________whose                                   address                                    is
________________________________________________________________________________________ ___________________________
_________.

Dated: ______________, _______



Holder’s Signature:                _____________________________

Holder’s Address:                  _____________________________

         _____________________________




Signature Guaranteed: ___________________________________________



NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alterat ion or
enlargement or any change whatsoever, and must be guaranteed by a bank or trust company. Officers of corporations and those acting in a
fiduciary o r other representative capacity should file proper evidence of authority to assign the foregoing Warrant.




                                                                     7
Exhi bit 23.1




                                   CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

We have issued our report dated July 2, 2009, with respect to the financial statements of Pimi Agro Cleantech, Inc. (wh ich rep ort expressed an
unqualified opin ion and contains an explanatory paragraph relating to substantial doubt about Pimi Agro Cleantech, Inc.'s ability to continue as
a going concern) contained in the Registration Statement and Prospectus to be filed on August 3, 2009. We consent to the use of the
aforementioned report in the Reg istration Statement and Prospectus, and to the use of our name as it appears under the captio n "Experts."




/s/ Fahn Kanne & Co.


Fahn Kanne & Co.
Cert ified Public Accountants (Isr.)

Tel-Aviv, August 3, 2009